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Australia: Shares jump the most in 7 weeks following surprise jobs data

Thursday, June 11, 2015 - 11:19
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[SYDNEY] Australian shares rose the most in seven weeks on Thursday after better than expected employment data added to the upbeat mood following strong gains on Wall St overnight.

Official data showed employment jumped by 42,000 in May, far exceeding expectations, and the unemployment rate fell.

That added extra momentum to a market which was already tracking a hefty gain on Wall St overnight on optimism for a solution to the Greek debt crisis and the state of the US economy.

After snapping a 6-day losing streak a day earlier, the S&P/ASX 200 index was up 70.7 points or 1.3 per cent at 5549.3 by 0238 GMT, its biggest percentage gain since April 24. "Bargain hunters are back and we finally have a nice bounce," said OptionsXpress market analyst Ben Le Brun. "Every sector is in positive territory with banks and miners in particular." Banks surged, ending a selldown that has dragged down stocks over several weeks as investors worry about tough new capital requirements.

The so-called "Big Four" banks - Commonwealth Bank of Australia, Westpac Banking Corp, National Australia Bank and Australia and New Zealand Banking Group - all rose nearly 2 per cent.

Insurers QBE and Insurance Australia Group rose more than 2 per cent.

Miners rose after the prices of base and precious metals advanced overnight. BHP Billiton and rival Rio Tinto each added 2.4 per cent, while iron ore producer Fortescue Metals Group firmed 4.7 per cent.

Energy stocks followed the oil price higher, with Oil Search up 4 per cent and Woodside Petroleum and Santos both about 2 per cent higher.

Electronics retailer Harvey Norman jumped 4 per cent and gambling firms Tabcorp and Crown Resorts rose 2.9 per cent and 2.1 per cent on expectations that job creation will increase demand.

New Zealand's benchmark NZ50 share index surged more than 1 per cent to 5,864.71, as a central bank rate cut and the prospect of further easing highlighted the yield appeal of stocks.

The gains were strongest among the top-10 shares with Fletcher Building rocketing 2.85 per cent, while casino operator Sky City and Sky TV both rose around 1.9 per cent.

Earlier the Reserve Bank of New Zealand cut its overnight cash rate by 25 basis points to 3.25 per cent, the first cut in four years, because of weaker commodity prices and soft inflation.

High yielding stocks such as Mighty River Power and TrustPower posted gains.

The prospect of cheaper money to support domestic activity also helped consumer stocks Briscoe and Hallenstein Glasson.

Healthcare software developer Orion rose 4.7 per cent, about half the losses it suffered the previous session, after it had warned a potential client had put contract talks on hold.

REUTERS