You are here

Australia: Shares rally tracking Wall Street gains


[SYDNEY] Australian shares rallied 1.7 per cent on Monday led by gains in US stocks while positive local job advertising figures helped boost investor confidence in the health of the economy, with hefty gains in banks and resources counters.

Trading volumes are expected to be weaker with almost half the country on a public holiday.

The S&P/ASX 200 index jumped 86.08 points to 5,138.1 by 0117 GMT. The benchmark fell 1.8 per cent on Friday.

The index fell for two straight months to September hitting a 2-year trough and forcing most market strategists to slash their year-end expectations. A new Reuters poll shows the index is still seen ending 2015 roughly 3 per cent above Friday's close.

Technically, the market is now moving towards positive territory for the first time since end of July, said James McGlew, executive director of corporate stockbroking at Argonaut. "There is an enormous support coming in at 4800-5000 points. Last month alone we've tested 5,000 points on eight occasions and every time it is breached we've seen strong bounce back from there," he added.

A monthly survey by Australia and New Zealand Banking Group showed total job advertisements rose 3.9 per cent to 153,778 per week on average in September.

Gold miners such as Newcrest and Evolution rallied 10.7 per cent and 7.5 per cent after the precious metal retained gains from its biggest daily jump in nearly nine months.

Energy-related shares such as LNG, Karoon Gas and Drillsearch surged 4-12 per cent.

Major banks including ANZ and Commonwealth Bank rose between 1 and 1.7 per cent while top miners BHP Billiton and Rio Tinto were up 3.4 and 1.9 per cent respectively.