Afternoon Market Report
The last 24 hours for global markets have been defined by positive news. One of the headline grabbing outcomes has been the Dow Jones closing at a new record high over night. Supporting news included European manufacturing reports which didn't disappoint investors, the Chinese administration announcing that the 2nd biggest economy in the world will grow at 7.5% this year and a better than expected read on activity in the US services sector. As a result the volatility which gripped the markets early in the week is a distant memory.
Australian consumer confidence surges in February
The ASX200 index rose 0.82 per cent to finish at 5,116 points, the All Ordinaries index gained 0.84 per cent to 5,130 points with every sector measured by the exchange ending higher. During the session there were 1.7 billion transactions which were valued at $5.8 billion. 567 stocks ended higher, 410 ended lower and 367 were unchanged.
Wednesday saw the blue ribband event of the week in economic terms,the 4th quarter growth figures were released by the ABS. The figures showed that the Australian economy expanded by 0.6% in the final 3 months of the year. Additionally growth in the 3rd quarter was upgraded to +0.7% from an original reading of +0.5%. The overall report was largely in line with the markets expectations. The trend rate of growth corroborated the RBA's stance of continuing to leave interest rates on hold for the foreseeable future, unless risks re-emerge at the hands of Europe, China or the US. Stocks leveraged to consumer spending were well supported as investors reflected on better than expected retail sales figures which were released yesterday Retail sales rose 0.9% well ahead of an expected increase of 0.3%. David Jones rose 0.67 per cent to $2.99, Myer gained up 1.75 per cent to $2.90, Harvey Norman rose 2.29 per cent to $2.68, JB Hi-Fi moved ahead by 4.02 per cent to $13.98. The grocers fared less well. Woolworths eased by 0.11 per cent to $35.19. Wesfarmers fell 0.21 per cent to $42.11.
The positive growth report for the December quarter was supportive for the banking sector notwithstanding the likelihood that the low point in the interest rate cycle is close at hand. ANZ gained 1.25 per cent to $29.23, Westpac rose 1.31 per cent to $31.66. National Australia Bank improved 0.78 per cent to $30.83, having hit a three-year high in earlier in the session. The bank announced its intention to cut costs by $900m over 5 years. CBA rose 0.92 per cent to $69.31 after trading at $69.86, an all-time record high.
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