EVENING REPORT (4.30pm AEST)
Fresh record highs in US markets overnight helped local shares post their biggest gains of 2014. The All Ordinaries Index (XAO) rose by 1.5 per cent, finishing above 5400pts for the first time in a week and largely making up for last week's 1.1 per cent tumble. Volume was also healthy due to index option expiry today. This tends to result in a spike in market activity.
All sectors finished firmer, with the energy sector, industrials, financials, and technology firms all rising by more than 1.5 per cent. The recently underperforming mining industry however was the standout. Despite the iron ore price being 30 per cent lower than at the end of 2013, the metal rose by 1.1 per cent overnight. Australia's biggest miner, BHP Billiton (BHP) rose by 3.2 per cent, Rio Tinto (RIO) gained 2.31 per cent and Fortescue (FMG) rose by 4.98 per cent.
The energy sector was another outperformer as Woodside Petroleum (WPL) made up a portion of yesterday's 4.5 per cent slide. Energy giant Shell sold down a large part of its interest in the Australian oil and gas producer earlier in the week at a 14 per cent discount. The major banks surged by as much as 1.8 per cent, which helped lift the market significantly. In recent years, the financial industry has overtaken the miners as Australia's largest sector. Network Ten shares fell by close to 7 per cent after the broadcaster warned that its television revenue will be 3.5-4.5f per cent below last year.
Today was one of the busier days of the week for economic data in Australia. The December quarter report on population growth was issued this morning. The country's population rose by 1.73 per cent over the 12 months to December 2013. A detailed report on the labour market was issued today for the month of May. There were further signs that the property market is picking up the slack from the mining industry. CommSec chief economist Craig James said that "Job growth was modest in the three months to May, but given the negative media attention on the Budget, this was understandable. But it is clear that the housing sector is now driving job gains with professional services like architects, surveyors, conveyancing staff, real estate agents and accountants in strong demand."
By the close, 2.43 billion shares changed hands worth $7.2 billion. 594 stocks finished higher, 429 in the red and 394 were unchanged.
Tonight will be quiet for market moving economic news globally. European leaders will be meeting, while the latest weekly report on jobless claims will be issued in the U.S.
Tomorrow, Westfield will be voting on its restructure plans and potential creation of the Scentre Group. The Bank of Japan's Governor will be speaking and European finance ministers will be meeting in Brussels on Friday night.
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