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Australian stocks end 1.47% stronger, S&P 200 surges 79.3pts

Australian stocks end 1.47% stronger, S&P 200 surges 79.3pts

SYDNEY: The Australian stocks ended 1.47 percent stronger, driven by unexpectedly wonderful performance from material stocks and huge increases across a majority of sectors.
At the official 4:15pm (AEDT) market close, the benchmark S & P/ASX200 index was up 79.3 points, or 1.47 per cent, to close at 5473.8 points, while the broader All Ordinaries index was up 77.5 points, or 1.44 per cent per cent, to close at 5447 points.
Macquarie Private Wealth division director Martin Lakos said the materials sector, which has been oversold in recent weeks, was today’s standout performer.
“That’s the sector that has been the best performer today at 2.5 per cent,” he said.
“It is a bit of a surprise, but we had a good recovery in the iron ore price. I think there’s still a view held by most market strategists that the outlook for China is stable at 7 per cent growth.
“The materials sector has been very oversold in the past couple of weeks, and we’re seeing a real rebound on being that oversold,” he added. “It’s more likely we will see these commodities stabilise and consolidate from these levels.”
Materials posted a 2.52 per cent rise — the strongest sector by the end of trade. BHP Billiton gained 2.49 per cent to close at $29.69, while Rio Tinto firmed 2.58 per cent to $58.05. Fortescue’s share price climbed 7.48 per cent to $2.73. BlueScope Steel added 2.16 per cent to $5.67.
Financial stocks rose 1.09 per cent. ANZ lifted 0.72 per cent to $32.23 and Commonwealth Bank rose 1.33 per cent to $86.05. NAB added 0.87 per cent to $33.76 and Westpac lifted 1.34 per cent to $33.34.
Energy stocks also ended the day in positive territory, lifting 0.91 per cent despite oil’s fluctuating fortunes. Santos lifted 0.83 per cent to $8.46 and Woodside Petroleum added 1.13 per cent to $38.58.

Consumer staples also enjoyed considerable gains, with Woolworths adding 1.97 per cent and Wesfarmers lifting by 1.24 per cent to $42.44.
Consumer discretionaries also posted a 2.09 per cent rise as lower petrol prices relieve the pressure on household budgets and encourage consumers to go shopping. Myer’s share price jumped 8.06 per cent, while The Reject Shop rose 4.61 per cent to $6.36.
Telstra’s share price rose 1.86 per cent to close at $6.02, while Qantas added 2.99 per cent to $2.41.
With regards to the Australian dollar, Mr Lakos believes it has further downside, especially if the Reserve Bank cuts rates next year.
“Macquarie has now changed its interest rate view with a view that the Reserve Bank will cut rates in the first quarter of 2015 to take the cash rate down to 2 per cent,” he said.
“They’ve made it very clear in their commentary that the Reserve Bank thinks the Australian dollar is overvalued and that we need a lower Aussie dollar to get the natural rebalancing of the economy