Australian shares jump 5pct on rate cut expectation
03 Nov 2008 5:54 PMAustralian shares jump 5pct on rate cut expectation
By Alison Bell
MELBOURNE, Nov 3 AAP - The Australian share market finished five per cent or51 billion stronger, as expectations of an interest rate cut tomorrow helped it to its best performance in almost two weeks.
The benchmark S&PASX200 index advanced 203.5, or 5.06 per cent, to 4221.5,while the broader All Ordinaries index was up 190.3 points, or 4.78 per cent, at 4173.
It was the biggest percentage rise for both indices since October 13, with stocks reflecting consumer items and staples performing strongly.
On the Sydney Futures Exchange, the December share price index futures contract finished 140 points, or 3.47 per cent, higher at 4,176 on a volume of 34,152 contracts.
The Reserve Bank of Australia (RBA) is expected to slash the overnight cashrate by 50 basis points tomorrow.
Today was the local markets' fourth consecutive day of stronger trading andthe highest closing level since October 21.
The value of All Ordinaries index stocks increased by47 billion, taking the overall market gain to51 million today.
Macquarie Equities associate director Lucinda Chan said a good lead from Wall Street, positive sentiment and the anticipation of another cut to interest rates tomorrow pushed the market into positive territory.
"The Australian dollar is also trading firmly at 68 cents as we speak whichhas added to an overall sense of confidence," she said.
Consumer staples were the standout sector today, with major stocks posting strong gains despite weak September household spending data, Ms Chan said.
"Their rises are unbelievable," she said.
Woolworths jumped1.83, or 6.58 per cent, to $29.63, while Wesfarmers leapt2.88, or 13.41 per cent, to $24.35 and Harvey Norman put on 12 cents, or4.65 per cent, to2.70.
The major banks were also stronger, with National Australia Bank putting on1.11, or 4.63 per cent, to $25.10, ANZ adding $1.14, or 6.57 per cent to $18.50.
Commonwealth Bank firmed1.54, or 3.82 per cent, to $41.84, and Westpac rose1.19, or 5.87 per cent, to $21.47.
Australia's major miners also moved into positive territory, with BHP Billiton jumping1.91, or 6.82 per cent, to $29.90 and rival Rio Tinto adding $4.40, or 5.67 per cent, to82.00.
Spot gold in Sydney finished atUS734.30 an ounce, up US95 cents on Friday's close ofUS733.35.
Local gold stocks finished mixed, with Newmont Mining losing 17 cents, or 4.18 per cent, to3.90, Lihir Gold firming five cents, or 2.56 per cent, to2.00 and Newcrest Mining putting on 44 cents, or 2.12 per cent, to $21.24.
Mount Gibson Iron was the top traded stock, with 80.45 million shares worth31.8 million changing hands.
Mount Gibson Iron shares fell one cent to 39.5 cents after it said it's major shareholder, APAC Resources Ltd, and China's Shougang Concord International Enterprises have thrown it a lifeline and agreed to purchase available ore and inject about162.5 million into the company.
National turnover reached1.3 billion shares worth $3.53 billion, with 697stocks up, 287 down and 278 unchanged.
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