Australia Market rebounds on following Dow Jones increase

Headline indices of the Australian financial market rebounded strongly from two year low on Thursday, 27 December 2018, with investors heartened by Wall Street's best performance in nine years and on the back of surging crude oil prices and gains for Chinese copper. Most of ASX sectors inclined, with shares in materials, energy, and financials being notable gainers. At closing bell, the benchmark S&P/ASX200 index added 103.40 points, or 1.88%, to 5,597.20 points, while the broader All Ordinaries index grew 102.50 points, or 1.84%, to 5,662.10 points. The market was closed on Tuesday and Wednesday for the Christmas and Boxing Day public holidays.

Shares of energy stocks inclined on the back of surging oil prices.Crude oil prices rose sharply amid thin deals on Wednesday, rebounding from a 6.7% plunge on Christmas Eve. WTI crude for February rose $3.69 or 8.7% to close at $46.22 a barrel on the New York Mercantile Exchange, recording their biggest single session gain in several months. Among energy stocks, Origin Energy powered 3.7%, Viva Energy up 3.9%, and Beach Energy up 1.5%. Woodside Petroleum added 4.2% after the Perth company said it had hired US engineering firm Bechtel to design a second LNG production train at its Pluto plant in the Pilbara, while Santos, Oil Search, Caltex, Whitehaven Coal and Yancoal each rose in between 1% to 3%.

 

Shares of materials sector recorded solid gains, on the back of gains for Chinese copper. Chinese copper is marginally higher after two sessions of declines, with prices capped by concerns over slowing economic growth, which is expected to curb demand for industrial metals. The most-traded copper contract on the Shanghai Futures Exchange closed up 130 yuan, or 0.3%, at $US6,979.21 a tonne. Mining giant BHP lifted 2% and Rio Tinto was 1.2% higher. South32 gained 3.1%, with Fortescue Metals adding 0.7%, and Bluescope Steel 0.9% higher.

Shares of financials were also higher, with Commonwealth Bank leading the charge for the big four, up 1%. Investment firm Challenger lifted 3.2%, while Pinnacle gained 5.6%, and AMP jumped 3.4%. The industry has struggled this year with widespread revelations of misconduct that surfaced during a damaging national inquiry into the sector.

CURRENCY: Australian Dollar edged up against greenback on Thursday. The Australian dollar was quoted at 70.74 US cents, up from 70.62 US cents on Monday.

OFFSHORE MARKET NEWS: Wall Street stocks roared back to life in post-Christmas trade on Wednesday, shaking off four straight routs following strong retail sales data and White House reassurances that Fed Chair Jerome Powell won't be fired. The Dow Jones Industrial Average finished up 1,086.25 or 5% at 22,878.45, meanwhile the Nasdaq spiked 361.44 points or 5.8% to 6,554.36 and the S&P 500 surged up 116.60 points or 5% to 2,467.70.

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