The ASX200 index rose 0.6 per cent to 5230.0 on Thursday. Photo: Ben RushtonLocal shares ignored a fall on Wall Street overnight to close higher for the first time this week, with poor jobs data shoring up the belief that further interest rate cuts from the Reserve Bank are on the cards.
The Dow Jones was down 1 per cent overnight, thanks mostly to a bleak outlook from Wal-Mart Stores – whose stock suffered its biggest plunge in more than 27 years after predicting a decline in profit during the next fiscal year – coupled with disappointing retail sales figures and dropping wholesale prices.
However, the local market was up from the outset and spiked to the day’s high after the release of September’s jobs report showing the n economy shed 5100 jobs instead of creating nearly 10,000 new ones as had been expected.
The unemployment rate remained at 6.2 per cent.
The market settled in the afternoon but still finished higher, with the benchmark ASX200 index rising 0.6 per cent to 5230.0 and the All Ordinaries up 0.7 per cent to 5265.6.
“I think the market is starting to price in a much better probability of an interest rate cut in November or December, and potentially another one in the first quarter of next year,” said Aurora Funds Management senior portfolio manager Sheridan Hure.
“Westpac’s capital raise on Wednesday was largely anticipated by the market and the fact that their putting their rates up at the same time is probably a net positive for the bank.”
Brent crude oil fell 4 US cents to $US49.20 per barrel overnight but despite that energy stocks were among the market’s best performers.
Woodside Petroleum gained 1 per cent to $31.17 in part after reports it was revising its bid in its $11.6 billion approach for Oil Search. The oil explorer also reported a 45 per cent drop in third-quarter revenue due to weak oil and gas prices and narrowed its full-year production forecast.Oil Search climbed 3.8 per cent to $7.41.
Iron ore lifted slightly overnight, adding 0.3 per cent to $US55.12 per tonne. Among the blue-chip miners, BHP put on 1.8 per cent to $25.12 and Rio Tinto lifted 2.3 per cent to $54.25.
Pureplay iron ore miner Fortescue shot up 6 per cent to $2.29 after maintaining full-year guidance at 165 million tonnes shipped but reporting flat first quarter iron ore shipments and a seventh straight quarter of cost cuts.
The banks were mixed. Westpac, remained in trading halt at $30.27 as investors digested Wednesday’s announcement it would lift variable home loan interest rates by 0.2 percentage points.
ANZ fell 0.3 per cent to $28.56, Commonwealth Bank lifted 1.1 per cent to $75.40, and National closed flat at $31.52.
Asciano shares slumped 7.6 per cent to $7.88 after the n Competition and Consumer Commission raised concerns over Brookfield Infrastructure’s proposed $8.9 billion takeover of the rail and ports group, claiming it could lead to a “substantial lessening of competition” for rail haulage services in Western and Queensland.
Blood and plasma giant CSL shed 0.3 per cent to $88.99 after launching a $1 billion share buyback, its largest ever, just months after completing last year’s $950 million buyback.
The company said at its annual general meeting that it was trading in line with expectations in the first quarter of the 2016 financial year, reaffirming its net profit growth target of 5 per cent and revenue growth of 7 per cent.
The gold price surged to its highest level in more than three months overnight – climbing 1.84 per cent to $US1186.90 per ounce – as disappointing US retail sales made investors even more confident that the US central bank would delay any interest rate hike.
Among gold miners, Newcrest firmed 5.3 per cent to $15.34, Evolution Mining surged 7.4 per cent to $1.60 and Northern Star gained 4 per cent to $3.15.