Several factors have combined on Wednesday to help regional stocks move higher on Wednesday . The ASX200 rose 0.4% to 5223.80, edging closer to a five-year high of 5249.6 last seen in May.
Higher energy prices have been a bugbear for investors for several weeks as a diplomatic solution seemed less likely in relation to Syria. However crude oil prices fell around lunch time in Sydney after U.S. President Barack Obama in a live address from the White House signs of a diplomatic solution were encouraging and asked the US Congress to postpone any vote on military action. While Syria isn´t a major oil producer, the concern centred on the likelihood that military action could destabilise the region as a whole and undermine energy supply. Whilst the drop in energy prices was welcomed overall, the decline consigned energy producers to the back of the field compared to other sectors. Woodside Petroleum (WPL) shares ended at $38.60 down 1.1% or 45 cents, Oilsearch (OSH) closed the session at $8.46.
Another important contribution to the better tone local was a better than expected reading on consumer confidence. The Westpac Melbourne Institute Index of Consumer Sentiment rose by a solid 4.7% in September. The lift in sentiment took the index to 110.6, its highest reading for almost three years. A level above 100 means that the number of optimists outweighs the number of pessimists.
Sentiment is now 12.7% higher than it was a year ago. The main driver of the lift in sentiment over the month was the federal election. The survey was conducted over a period that covered both before and after the election. Consumers like certainty and an election outcome eliminates the uncertainty around who will govern the country. The election also marked the end of a protracted and tiresome campaign, which effectively began in January when Julia Gillard called for an election in September. The better news helped stocks leveraged to discretionary spending. Harvey Norman (HVN) shares ended at $3.18 a gain 7 cents or 2.25%
In the US tonight -. A quiet session looms in the US for data. Releases include MBA Mortgage Index, Wholesale Inventories, Crude Inventories
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