Australia: Shares jump to 2-mth high after ECB sparks global rally

[SYDNEY] Australian shares surged 1.6 per cent to a 2-month high on Friday, taking their cue from a global rally after the European Central Bank signaled it might offer more stimulus to stoke the euro zone economy and spark inflation.

The ECB, as widely expected, took no new steps on Thursday, but signaled it could extend its 1 trillion euro bond-buying quantitative easing program if necessary to combat weak inflation.

The S&P/ASX 200 index jumped 86.56 points to 5,350.40 by 1229 GMT, its biggest daily percentage gain since Oct 5. The benchmark rose 0.3 per cent on Thursday.

Trading has been subdued for much of this week as investors were wary ahead of key events, including the now-concluded ECB meeting, and next week's policy reviews of the US Federal Reserve and the Bank of Japan.

A sluggish start to US corporate earnings season had also dulled investor appetite, but thanks to Friday's stellar performance the index is on track to end the week up 1.6 per cent.

For the month so far, it is up nearly 7 per cent, on track for its best performance since Oct 2011.

Major banks led the gains, with National Australia Bank rising 2.1 per cent after it raised mortgage rates.

Commonwealth Bank of Australia and ANZ Banking were up 1.4 per cent each.

Miners BHP Billiton and Rio Tinto rose 2.3 per cent and 1.8 per cent respectively while Fortescue jumped 2.4 per cent.

Wesfarmers climbed 2.4 per cent after first quarter data showed that Coles supermarkets gained more sales and market share amid an intensifying price war with Woolworths and German discount grocer Aldi Inc For more individual stocks activity click on New Zealand stocks hit an all-time high as a surge in global markets overnight re-energised a flagging rally. The NZX 50 index, which closed nearly flat on Thursday, climbed 0.62 per cent, or 36.92 points, to 5,960.52.

The benchmark rose as far as 5,966.82, surpassing the previous peak of 5,963.05 set in August. It was up 2.4 percent so far this week, adding to last week's 3.2 per cent gain. The index is on track to close higher for an 11th session.

Buyers have returned in a big way after the market suffered its biggest quarterly fall since 2012 in the third quarter.

Leading the market, glass product maker Metro Performance Glass put on 2.6 per cent, Westpac Banking Corp was up 2.0 per cent and online advertiser Trade Me Group added 1.9 per cent.

Only five stocks in the index were in the red and even then, their losses were modest. Online accounting service provider Xero, the worst performer on the day, was down a mere 1.4 per cent.

REUTERS