australian stocks surge higher on optimism surrounding greece 1606092015

The big banks put on a stellar show, gaining between 1.5 per cent and 2 per cent

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By :  ,  Financial Analyst

The rising global tide of bullish equity markets helped lift Australian stocks by over 1 per cent on Tuesday, as investors cheered the positive developments in Greece’s negotiations with its creditors and the likelihood of an agreement.

On the ASX, yield plays such as the big banks and Telstra Corporation Ltd (ASX:TLS) were snapped up by investors, while stocks in energy and mining also found favour. All sectors ended up in positive territory.

Indices and sectors

The benchmark S&P/ASX 200 rose 74.1 points, or 1.3 per cent, and closed at 5,684.3, while the broader All Ordinaries index was up 68.3 points, or 1.2 per cent, at 5,671.4.

The biggest gaining sectors were healthcare (+1.98 per cent), telecommunications services (+1.59 per cent), financials (+1.54 per cent), and utilities (+1.43 per cent). There were no losing sectors for the day.


Amongst miners, BHP Billiton Limited (ASX:BHP) and Rio Tinto Limited (ASX:RIO) both rose about 1 per cent to AU$28.61 and AU$56.34 respectively. However, Fortescue Metals Group Limited (ASX:FMG) was down 0.91 per cent to AU$2.18.

Energy, too, presented a mixed picture. Woodside Petroleum Limited (ASX:WPL) moved up 0.33 per cent to AU$35.95, Oil Search Limited (ASX:OSH) was up 0.13 per cent to AU$7.50, and Santos Ltd (ASX:STO) shot up 1.33 per cent to AU$8.35. However, Origin Energy Ltd (ASX:ORG) was lower by 0.08 per cent to AU$12.92. The Western Australian government signed a deal worth AU$1 billion with Woodside Petroleum to receive domestic gas supply from the company’s Browse floating LNG project, according to  the ABC.

The big banks powered ahead with gains between 1.5 per cent and 2 per cent. Commonwealth Bank of Australia (ASX:CBA) surged 2.05 per cent to AU$86.76, Westpac Banking Corp (ASX:WBC) shot up 1.75 per cent to AU$33.70, Australia and New Zealand Banking Group (ASX:ANZ) rose 1.55 per cent to AU$33.43 and National Australia Bank Ltd. (ASX:NAB) gained 1.87 per cent to AU$34.40.

Telecommunications sector stocks had a strong day. Telstra Corporation Ltd (ASX:TLS) moved up sharply by 1.62 per cent to AU$6.28, TPG Telecom Ltd (ASX:TPM) surged 3.43 per cent to AU$9.36, M2 Group Ltd (ASX:MTU) was up 1.37 per cent at AU$11.09 and iiNet Limited (ASX:IIN) rose 0.52 per cent to AU$9.70.

Amongst retailers, Woolworths Limited (ASX:WOW) shed 0.04 per cent to AU$26.85. However, Caltex Australia Limited (ASX:CTX) gained 2.34 per cent to AU$33.68, Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, was up 0.52 per cent to AU$40.48 and Myer Holdings Ltd (ASX:MYR) rose nearly 2 per cent to AU$1.34.

Economic news, currency and market outlook

According to data from the Bureau of Statistics, Sydney is streets ahead of the next strongest capital city market in terms of the rise in home prices, reports the ABC. The Bureau’s residential property index showed that Sydney had a 3.1 per cent jump in prices during the March quarter, and 13.1 per cent over the 12 months ended March.

Stocks rose marginally on Wall Street Tuesday, driven by optimism surrounding the negotiations between Greece and its creditors. The Dow Jones Industrial Average rose 24.29 points, or 0.13 percent, to 18,144.07, while the S&P 500 gained 1.35 points, or 0.06 percent, to 2,124.2. The Nasdaq Composite added 6.12 points, or 0.12 percent, to 5,160.10, another record close.

The Australian dollar is trading weaker against the greenback following positive US economic data and Fed comments, according to the Business Spectator. At 07:00 this morning (AEST) the Aussie was trading at 77.37 US cents, down from 77.39 US cents on Tuesday.

The Australian stock market is likely to open flat today given that at 07:00 am (AEST) this morning the September ASX SPI200 Index (AP) Futures was up just 1 point at 5,624, according to the Business Spectator.

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