australian stocks surge higher on upbeat jobs data value buying 1554982015

The Australian stock market put up its best showing in nearly seven weeks on Thursday, boosted by overnight gains on Wall Street, bullish commodities prices, strong domestic employment numbers and bargain-hunting amongst battered blue chip stocks.

In market action, the S&P/ASX 200 was bullish from the word go and surged to its best levels of the day, shortly before 1 PM. Though the rest of the day was range bound, the index closed at the day’s high, a bullish signal.

Indices and sectors

The benchmark S&P/ASX 200 rose 78.1 points, or 1.4 per cent, and closed at 5,556.7, while the broader All Ordinaries index was up 76.6 points, or 1.4 per cent, at 5,562.6.

The sectors that closed with gains were financials (+2.07 per cent), energy (+2.02 per cent), materials (+1.95 per cent), telecommunications (+1.30 per cent) and consumer discretionary (+1.22 per cent). The only two losing sectors were consumer staples (-0.37 per cent) and real estate investment trusts (-0.10 per cent).

Stocks

The big banks stormed back into reckoning in Thursday’s trade, after plumbing their lowest depths in 2015. Commonwealth Bank of Australia (ASX:CBA) shot up 1.88 per cent to AU$81.41, National Australia Bank Ltd. (ASX:NAB) was up 2.14 per cent to AU$32.51, Australia and New Zealand Banking Group (ASX:ANZ) rose 2.32 per cent to AU$31.81 and Westpac Banking Corp (ASX:WBC) closed higher by 1.95 per cent at AU$31.97.

In energy stocks, Woodside Petroleum Limited (ASX:WPL) jumped 1.74 per cent to AU$36.85, Origin Energy Ltd (ASX:ORG) rose 0.95 per cent to AU$12.77, Oil Search Limited (ASX:OSH) surged 4.44 per cent to AU$7.76 and Santos Ltd (ASX:STO) was up 2.48 per cent to AU$8.27.

Amongst miners, BHP Billiton Limited (ASX:BHP) gained 2.06 per cent to AU$28.23 and Rio Tinto Limited (ASX:RIO) shot up 2.51 per cent to AU$57.48. Fortescue Metals Group Limited (ASX:FMG) zoomed 6.44 per cent to AU$2.48 and was the second-biggest gainer on the S&P/ASX 200 yesterday. BC Iron Limited (ASX:BCI) put on 8.45 per cent to AU$0.385. Iron ore prices are in the midst of a rally and have reached above US$65 for the first time in four months.

In telecommunications, Telstra Corporation Ltd (ASX:TLS) gained 1.34 per cent to AU$6.04, TPG Telecom Ltd (ASX:TPM) shot up 1.52 per cent to AU$8.68, M2 Group Ltd (ASX:MTU) rose 1.88 per cent to AU$10.83 and iiNet Limited (ASX:IIN) fell 0.10 per cent to AU$9.59. According to a report in the ABC, Australian competition watchdog ACCC appears to have reservations about permitting TPG Telecom's proposed takeover of rival iiNet, and needs more data on the deal.

However, retailers presented a mixed performance. Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, fell 0.31 per cent to AU$41.42 and Woolworths Limited (ASX:WOW) declined 1.28 per cent to AU$27.08. On the other hand, Caltex Australia Limited (ASX:CTX) was up 0.44 per cent to AU$32.21 and Myer Holdings Ltd (ASX:MYR) surged 3.38 per cent to AU$1.38.

Economic news, currency and market outlook

Employment data from the Bureau of Statistics showed that 42,000 jobs were added in the economy in May and the unemployment rate fell to a one-year low of 6 per cent, according to ABC. Full-time jobs jumped by 14,700, while part-time workers increased by 27,300 in a strong jobs report that smoked economists’ expectations of 15,000 new jobs and an unemployment rate of 6.2 per cent.

Ratings agency Fitch has placed BHP Billiton, Rio Tinto and Anglo American plc (LON:AAL) on negative ratings outlooks due to the slump in commodity prices, as reported by ABC.

On Wall Street overnight, stocks rebounded on strong retail sales in the US. The Dow Jones Industrial Average rose 55.36 points, or 0.31 percent, to 18,055.76. The S&P 500 gained 5.3 points, or 0.25 percent, to 2,110.5 and the Nasdaq Composite added 7.15 points, or 0.14 percent, to 5,083.84.

The Australian dollar is currently trading somewhat lower after the US dollar strengthened due to better than expected US retail data, according to the Business Spectator. At 07:00 this morning (AEST), the Aussie was trading at 77.56 US cents, down from 77.61 US cents on Thursday.

The Australian stock market is likely to open flat today given that at 07:00 this morning (AEST) the June ASX SPI200 Index (AP) Futures was down 6 points at 5,549.