(Australian Associated Press)
The Australian share market has closed at its highest level in 20 months after stronger US wage data boosted investors’ confidence in the US economy and helped lift the local bourse to its fifth straight positive finish so far this year.
The benchmark S&P/ASX200 closed about 5,800 points for the first time since May 5, 2015, while the broader All Ordinaries index again finished above 5,800 after breaching that mark on Friday.
A US jobs report released on Friday showed a solid but slightly disappointing increase in jobs of 156,000 in December but wage growth surprised on the upside.
That, plus hawkish comments from some members of the US Federal Reserve, boosted the US dollar, and US equity markets pushed to new highs.
Atlantic Pacific Securities client adviser Gary Huxtable said the Australian market had been bolstered by the US lead.
“It’s mainly due to what happened in the US on Friday night with the non-farm payrolls report. New jobs came under expectations, but it’s more about the wages growth,” Mr Huxtable said.
“That’s added some fuel to the fire about inflation expectations, and bid up the US dollar.”
Mr Huxtable said some of the best performing stocks on the Australian market were those with large US dollar-denominated earnings.
Insurer QBE lifted 37 cents to $12.80, share registry Computershare added 19 cents to $12.52, building products supplier James Hardie strengthened 26 cents to $21.82, pallets and containers supplier Brambles rose 17 cents to $12.67, and hearing implants maker Cochlear jumped $5.42 to $128.97.
The big four banks also boosted the bourse. Commonwealth Bank was up $1.13 to $85.26, Westpac improved 50 cents to $33.97, National Australia Bank advanced 54 cents to $32.06, and ANZ put on 39 cents at $31.77.
But weaker iron ore prices weighed down the big miners. BHP Billiton dipped three cents to $25.47, Rio Tinto dropped 78 cents to $59.35, and Fortescue Metals slipped 23 cents to $5.84.
Whitehaven Coal fell five cents to $2.72 after lowering the production guidance for its Narrabri mine in NSW by about six per cent after encountering “adverse geotechnical conditions” at the site.
Among other stocks, vaccines and blood products supplier CSL gained $1.67 to $104.00. CSL has secured marketing authorisation from the European Commission for its new treatment for haemophilia A and expects to launch the product in Europe in the coming months.
Meanwhile, the Australian dollar has slipped against its US counterpart as the greenback rebounded following the US jobs and wages report and the comments from US Fed officials.
The Aussie dollar was at 73.08 US cents at 1700 AEDT, down from 73.22 US cents on Friday
ON THE ASX:
* On Monday, the benchmark S&P/ASX200 was up 51.8 points, or 0.9 per cent, at 5,807.4 points
* The broader All Ordinaries index was up 48.7 points, or 0.84 per cent, at 5,857.7 points
* The March SPI200 futures contract was up 54 points at 5,775 points, with 27,589 contracts traded
* National turnover was 1.91 billion securities traded worth $4.18 billion.
CURRENCY SNAPSHOT at 1700 AEDT :
One Australian dollar buys:
* 73.08 US cents, from 73.22 US cents on Friday
* 85.846 Japanese yen, from 84.88 yen
* 69.45 euro cents, from 69.18 euro cents
* 59.97 British pence, from 59.15 pence
* 105.08 New Zealand cents, from 104.34 NZ cents
The spot price of gold in Sydney at 1700 AEDT was $US1,173.70 per fine ounce, down $US2.50 from $US1,176.20 on Friday
BOND SNAPSHOT at 1630 AEDT:
* CGS 5.25 per cent March 2019, 1.9015pct, up from 1.846pct on Friday.
* CGS 4.25pct April 2026, 2.7032pct, up from 2.625pct.
Sydney Futures Exchange prices:
* March 2017 10-year bond futures contract at 97.200 (implying a yield of 2.800pct), down from 97.280 (2.720pct) on Friday.
* March 2017 3-year bond futures contract at 97.960 (2.040pct), down from 98.020 (1.980pct).
(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session