Finance Finance News Aussie shares close Brexit gap
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Aussie shares close Brexit gap

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The Australian share market rallied strongly on Thursday, regaining more of the lost ground following last Friday’s shock Brexit vote that saw around $50 billion in value wiped in a single trading session.

The key ASX 200 benchmark index closed 1.7 per cent, or 91 points, higher at 5233.4 points – close to the 5298.2 points level just before the Brexit result sparked a selling wave.

The broader All Ordinaries Index also closed 1.7 per cent higher at 5310.4 points, with the Australian market following strong overnight leads from the major bourses in Europe and the US.

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The strong trading session also reflected buying activity as fund managers ruled off their books and rebalanced their share portfolios on the last day of the 2015-16 financial year. Meanwhile, at 4:15pm AEST, the Australian dollar was weaker, trading at US74.25c.

According to superannuation research house Chant West, most superannuation investors should expect to achieve slightly positive returns for the full financial year.

“Early estimates suggest that the median growth fund will post a small positive return of about 2.5 per cent, while some of the better-performed funds may deliver up to 6 per cent,” said director Warren Chant.  “Growth funds have 61 to 80 per cent of their investments in growth assets, and are the ones in which the majority of Australians are invested.”

The All Ordinaries Index finished the 2014-15 financial year at 5459, about 230 points higher than the current level.

Thursday’s rises on the ASX were broad based with banks, miners, utilities and industrial stocks stronger.

ANZ rose 2.01 per cent to $24.08, BHP was up 1.86 per cent to $18.64 and pipeline group APA was up 3.53 per cent to $9.24.

Markets in Europe and the United States rose for a second day in a row, as concerns about the impact of Britain’s decision to leave the European Union abated.

Analysts said market sentiment in Europe and the US had been soothed by the idea central banks would ultimately do what was necessary, in terms of triggering stimulus measures to boost growth.

Investors appeared to be bargain-hunting in the wake of the heavy sell-off, immediately after the Brexit vote.

On Wall Street, financial stocks fared particularly well, and the energy sector also benefited from higher oil prices.

By the close, the Dow Jones Industrial Average had added 1.6 per cent to 17,694.

The S&P 500 Index gained 1.7 per cent to 2,070 and the Nasdaq finished 1.9 per cent higher at 4,779.

European shares out-performed, with London’s FTSE 100 Index jumping 3.6 per cent to 6,360.

The CAC in Paris gained 2.6 per cent to 4,195 and Germany’s DAX closed 1.75 per cent higher at 9,612.

On the cross-rates, it was worth 66.9 eurocents, 55.3 British pence, 76.6 Japanese yen and $NZ1.047.

West Texas Crude oil had increased to $US49.80 a barrel, the price of a barrel of Tapis had risen to $US50.19, and spot gold was also higher at $US1,318.71 an ounce.

with ABC

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