The Australian share market has surged through the 6300 barrier in the first trading session after the four-day Easter break, finishing at its highest point in eight months on a buoyant energy sector.
The benchmark S&P/ASX200 index finished up 59.6 points, or 0.95 per cent, to 6,319.4 points at 1615 AEST on Tuesday, while the broader All Ordinaries rose 61.2 points, or 0.96 per cent, to 6,411.1.
Pepperstone head of research Chris Weston said the rise, while unexpected, was undoubtedly helped by higher oil prices
“It’s a difficult one – the moves have blown people away a bit,” Mr Weston said.
“While 0.9 per cent (as a whole), it’s not breathtaking stuff, but we certainly hadn’t been positioned for this situation.”
Consumer discretionaries, the banks, and tech sectors all rose more than one per cent while energy stocks jumped 2.5 per cent after oil prices soared on the United States’ announcement it would take more steps to choke off Iranian oil exports.
Mr Weston said it was a “dangerous game” for US President Donald Trump to allow oil prices to move higher in the short term, with the hope Saudi Arabia increases their supply.
“Trump has made it clear he is a low oil man… and if you take Iran out of the game, someone has to fill their boots,” Mr Weston said.
“But the elastic band might be being pulled a bit too far here – we’ve seen the supply response but where’s the demand?”
Santos rose 3.05 per cent to $7.44, while Woodside Petroleum, Caltex, Oil Search and Origin Energy gained 2.55, 1.64, 1.74 and 3.42 per cent respectively.
Wesfarmers, Breville Group, Domino’s Pizza, Aristocrat Leisure and Tabcorp Holdings helped lift the consumer discretionary sector 1.93 per cent as a whole, while utilities and tech stocks were the next strongest.
The Nasdaq was the best performing US index overnight, gaining 0.22 per cent compared to a 0.1 per cent gain for the S&P500 and a 0.18 per cent decline for the Dow Jones Industrial Average.
The ASX tech sector as a whole was up 1.48 per cent, with EML soaring 13.79 per cent after it signed a deal with gambling giant bet365.
The heavyweight financial sector gained momentum through the morning to finish 1.05 per cent higher.
Westpac was the best performer of the big four banks, up 1.23 per cent to $27.16.
The Aussie dollar slipped as the day wore on, and was buying 71.19 US cents from 71.36 US cents on Monday.
Meanwhile, analysts expect lacklustre first-quarter inflation data to further test the Reserve Bank’s resolve on Wednesday as domestic demand softens, though an immediate rate cut remains unlikely after strong job figures last week.
ON THE ASX:
* The benchmark S&P/ASX200 index was up 59.6 points, or 0.95 per cent, to 6,319.4 points at 1615 AEDT on Monday.
* The All Ordinaries was up 61.2 points, or 0.96 per cent, to 6,411.1.
* At 1630 AEDT, the SPI200 futures index was up 39 points, or 0.62 per cent, to 6,309.0.
CURRENCY SNAPSHOT AT 1630 AEDT:
One Australian dollar buys:
* 71.19 US cents, from 71.36 on Monday
* 79.65 Japanese yen, from 79.87
* 63.30 euro cents, from 63.60
* 54.84 British pence, from 54.97
* 106.84 NZ cents, from 106.84