Finance Finance News Australian shares open up

Australian shares open up

AAP
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Australian shares have opened stronger following Wednesday’s strong rise with the All Ordinaries index sitting up 0.38 per cent at 5102.6 points.

BHP was stronger despite its pledge to pay $8.5 billion to the Brazilian government with partner Vale following the tragic collapse of the Samarco mine dam which took 19 Brazilian lives.

The big mining group was up 4.48 per cent to $17.48 while NAB and Woolworths, two companies that have been hit by bad news also, were stronger.

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The Australian dollar continued recent strength being up 1.45 per cent to US72.85c.

In the US energy and bank stocks led Wall Street higher, adding to a rally in the previous session, after strong jobs data dispelled concerns over the health of the US economy.

The Dow Jones industrial average rose 34.24 points, or 0.2 per cent, to 16,899.32, the S&P 500 gained 8.1 points, or 0.41 per cent, to 1,986.45 and the Nasdaq Composite added 13.83 points, or 0.29 per cent, to 4,703.42.

But in the UK the FTSE indicator was down 0.09 per cent, or five points to 6147.06.

Concern lingered on Wednesday the US economy was on a weaker footing than thought, but recent data including a better-than-expected reading on private sector job creation in February has helped dispel those worries and given equities support.

The improvement in US economic data, including manufacturing, construction spending and auto sales this week, rekindled expectations the Federal Reserve could raise rates at least once later in 2016, giving a boost to bank shares.

“I’ve been encouraged by the economic numbers,” said Gary Bradshaw, portfolio manager of Hodges Capital Management in Dallas, citing jobs and manufacturing data.

Crude prices hovered in and out of negative territory through the day but ended higher, with US crude reaching $US35.17 at one point, its highest since January 6.

“There’s been so much pessimism around energy,” said Bradshaw, “and in spite of that oil is near $US35 (a barrel). When crude moves up it is telling the world, and particularly the US, is not going through a recession.”

The US economy continues to show signs of recovery even as China and the eurozone continue to look for support from their central banks.

The upbeat view on US stocks was evidenced in the CBOE Volatility index, a measure of anxiety among traders, which closed at its lowest level so far in 2016.

The materials sector was the worst performer on the S&P 500, weighed by a 7.8 per cent drop in Monsanto shares after the agricultural products maker cut its earnings guidance.

The largest percentage gainer on the S&P 500 was Chesapeake Energy, which rose 23.2 per cent, to $US3.40.
The energy sector rose 2.5 per cent and financials added 0.9 per cent.

Advancing issues outnumbered declining ones on the NYSE and the Nasdaq by a ratio of 2-to-1. The S&P 500 posted eight new 52-week highs and no new lows; the Nasdaq recorded 29 new highs and 27 new lows.

Volume in the US  hit 8.26 billion shares, slightly below the daily average in the past 20 sessions of 8.83 billion.

– with AAP

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