australian stocks surge higher for the third successive day 1645422015

Australian stocks were winners for the third day running as investors appeared to have become less apprehensive about a Greek exit from the Eurozone, and instead drew comfort from a higher close overnight on Wall Street and regional bullishness. Retail stocks, energy and financials were the sectors in bullish focus and contributed to the sharp jump of 1.5 per cent in the mainline indices.

Indices and sectors

The benchmark S&P/ASX 200 rose 84.1 points, or 1.5 per cent, and closed at 5,599.8, while the broader All Ordinaries index was up 81.9 points, or 1.5 per cent, at 5,587.9.

The top gaining sectors were consumer discretionary (+2.26 per cent), consumer staples (+2.15 per cent), information technology (+2.06 per cent), energy (+2.03 per cent), utilities (+1.98 per cent) and financials (+1.50 per cent). There were no losing sectors.

Stocks

All major stocks in the mining sector ended higher. BHP Billiton Limited (ASX:BHP) was up 1.31 per cent at AU$27.00, Rio Tinto Limited (ASX:RIO) moved up 0.04 per cent to AU$53.03 and Fortescue Metals Group Limited (ASX:FMG) shot up 4.37 per cent to AU$1.91.

Steelmaker BlueScope Steel Limited (ASX:BSL) rose 25.6 per cent to AU$3.68 and was the second-biggest gainer on the S&P/ASX 200. Fund manager Ausbil Investment Management revealed they had lifted their stake in the company to 6.19 per cent from 5.06 per cent, while analysts at Credit Suisse and UBS updated their guidance.

Energy stocks also showed solid gains. Woodside Petroleum Limited (ASX:WPL) rose 1.76 per cent to AU$35.27, Origin Energy Ltd (ASX:ORG) jumped 2.10 per cent to AU$12.17, Oil Search Limited (ASX:OSH) gained 0.14 per cent to AU$7.31 and Santos Ltd (ASX:STO) surged 2.86 per cent to AU$8.27.

The big banks continued their upward streak. Commonwealth Bank of Australia (ASX:CBA) rose 1.66 per cent to AU$87.45, Westpac Banking Corp (ASX:WBC) jumped 1.95 per cent to AU$33.01, Australia and New Zealand Banking Group (ASX:ANZ) was up 1.26 per cent to AU$32.91 and National Australia Bank Ltd. (ASX:NAB) gained 1.70 per cent to AU$34.04.

Retailers too rode high Thursday. Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, gained nearly 2 per cent to AU$39.96, Woolworths Limited (ASX:WOW) shot up 2.66 per cent to AU$27.80, Caltex Australia Limited (ASX:CTX) was up over 3 per cent to AU$33.01 and Myer Holdings Ltd (ASX:MYR) gained 2.40 per cent to AU$1.28. The star in the sector was Pacific Brands Limited (ASX:PBG), up 50.77 per cent to AU$0.490, and the top gainer on the S&P/ASX 200. Investors swooped on the stock after the company upgraded its profit guidance by 10 per cent following strong sales growth in its Bonds and Sheridan brands during the first half year.

Economic news, currency and market outlook

Figures from the Bureau of Statistics showed that, during the month of May, Australia’s trade deficit narrowed to AU$2.75 billion, being the value of imported goods and services that exceeded its exports during the month. However, the Bureau revised its trade deficit figure reported for April from a record AU$3.9 billion to an even bigger deficit of AU$4.14 billion, as reported by the ABC.

Non-farm payroll data out of the US showed that the economy added 223,000 jobs and that the unemployment rate fell to 5.3 per cent, a seven-year low. Though the headline numbers looked good, analysts fretted about the stagnant hourly wage rate and the decline in labour participation.

Stocks closed a shade lower on Wall Street Thursday as investors digested a soft jobs report for the month of June and the IMF cautioned on Greek financial turmoil ahead of the country’s referendum on Sunday. The Dow Jones Industrial Average fell 30.5 points, or 0.16 percent, to 17,730.11, the S&P 500 lost 0.64 points, or 0.03 percent, to 2,076.78 and the Nasdaq Composite dropped 3.91 points, or 0.08 percent, to 5,009.21.

The Australian dollar is trading mostly unchanged following weakness in the US dollar due to the soft jobs report. According to the Business Spectator, at 06:30 this morning (AEST) the local currency was trading at 76.35 US cents, down from 76.34 US cents on Thursday.

The Australian stock market is likely to open a shade lower today given that at 06:45 am (AEST) this morning the September ASX SPI200 Index (AP) Futures was down 23 points at 5,520.