The Australian share market has hit a three month high as surging oil prices fuelled a second straight day of big gains for the energy sector.
The benchmark S&P/ASX200 added 10.7 points, or 0.2 per cent, to 6,118.7 points, while the broader All Ordinaries index gained 11.5 points, or 0.2 per cent, to 6,215.9 points.
The prospect of US sanctions against Iran is lifting oil prices, amid investor nerves about rising risks of conflict in the Middle East and the impact on oil supplies.
Shares in local producers rose sharply as a result, Fairmont Equities managing director Michael Gable said, taking the energy sector index to its highest level in almost three years.
Woodside Petroleum gained 5.1 per cent to $34.00, Oil Search added 4.8 per cent to $8.48, Santos edged 0.2 per cent higher to $6.26 and Origin Energy moderated in afternoon trade to add 0.1 per cent to $9.95.
With energy stocks running hot, the share market is at its highest level since February 2, and nearing the ten-year highs it hit in January, Mr Gable said.
“For the first time in a very long time the ASX has actually out-performed the US market over the past several weeks,” Mr Gable said.
“Once those oil stocks cool off the market is likely to have a shallow consolidation as investors plot their next move.”
Higher base metal prices lifted the miners, with BHP Billiton up 1.7 per cent at $32.75, Rio Tinto up 1.6 per cent at $82.95 and gold miner Newcrest up one per cent to $22.13.
The major banks were mixed, with ANZ up 0.5 per cent at $28.08, Westpac up 0.3 per cent at $29.85, National Australia Bank down 0.5 per cent at $28.58 and Commonwealth Bank 0.6 per cent weaker at $70.98.
Embattled financial services giant AMP dropped 2.9 per cent to $4.05 as shareholders delivered a “first strike” against the company’s executive pay plan at a heated annual general meeting, and two class actions against AMP were filed in court.
Telstra gave up 2.5 per cent to $3.17 after withdrawing from sale its range of phones made by China’s ZTE, due to the impact of a ban on ZTE’s access to US suppliers.
Higher commodity prices have lifted the Australian dollar from the 11 month low hit on Wednesday.
ON THE ASX:
* The benchmark S&P/ASX200 was up 10.7 points, or 0.18 per cent, at 6,118.7 points
* The broader All Ordinaries index was up 11.5 points, or 0.19 per cent, at 6,215.6 points
* The SPI200 futures contract was up eight points, or 0.13 per cent, at 6,097 points.
* National turnover was 3.1 billion securities traded worth $6.4 billion
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 74.69 US cents, from 74.18 US cents on Wednesday
* 82.08 Japanese yen, from 81.36 yen
* 62.94 euro cents, from 63.71 euro cents
* 55.10 British pence, from 54.94 pence
* 107.86 NZ cents, from 106.95 NZ cents
The spot price of gold in Sydney at 1700 AEST was $US1,312.21 per fine ounce, from $US1,308.01 per fine ounce on Wednesday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 5.75 per cent May 2021, 2.1615pct, from 2.1671pct at Wednesday’s close
* CGS 2.25pct May 2028, 2.7738pct, from 2.7802pct
Sydney Futures Exchange prices:
* June 2018 10-year bond futures contract was 97.21 (implying a yield of 2.79pct), from 97.2 (2.8pct) on Wednesday
* June 2018 3-year bond futures contract was 97.795 (2.205pct), from 97.79 (2.21pct)
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)