Australian share prices closed up 1.1 percent on Friday as bargain hunters moved in and ended the market's three-day losing streak, dealers said. The benchmark S&P/ASX 200 was 61.3 points higher at 5,658, while the broader All Ordinaries ended up 55.6 points or 1.0 percent at 5,723.9.
Market volume was 1.43 billion shares worth 4.44 billion dollars 4.0 billion US), with 698 stocks up, 496 down and 317 unchanged. The major banks, which bore the brunt of a sell-off earlier this week on concerns that rising interest rates would deter borrowers and cause more loan defaults, led the recovery.
"The market remained in positive territory despite the thin volume and we saw some trade flows on what were considered oversold stocks," said Matt Lewis, a senior dealer at CMC Markets.
Commonwealth Bank finished 1.32 dollars or 2.7 percent higher at 50.14, ANZ rose 60 cents or 2.4 percent to 25.60, NAB advanced 63 cents or 1.9 percent to 33.43 and Westpac jumped 35 cents or 1.4 percent to 24.97 dollars.
"Banks were up after being under pressure for a while - the whole financial services sector has been impacted by what's happening in the US while higher interest rates by the Reserve Bank (of Australia) and by the banks themselves just casts a pool of uncertainty around the banks," said Michael Heffernan, a private client advisor at Austock Securities.
"We'll be anxiously waiting for the Commonwealth Bank report next Wednesday to see just how things are going." The Reserve Bank raised interest rates by 25 basis points to a 12-year high of 7.0 percent on Tuesday as concerns about rising inflation outweighed the threat of a global economic downturn.
In resources, BHP Billiton closed down 78 cents or 2.1 percent at 36.14 dollars as the market continued to absorb the implications of its offer for rival mining giant Rio Tinto, which was down 2.0 dollars or 1.6 percent at 125.00.
"The top has come off the pressure cooker and they're letting a bit of steam off at the moment as this take-over is going to take a while. We'll probably see things just simmering for a while," Heffernan said. "This is just the beginning, not the end - it will go on for weeks, months and may be a year ahead but you've got to keep in mind they're both great companies with great quality assets."
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