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Thread: Pre-Christmas cheer: Australian stocks end 2% higher, S&P surges 103.4pts

  1. Pre-Christmas cheer: Australian stocks end 2% higher, S&P surges 103.4pts

    PERTH: A recovery in commodity value, included iron ore and oil, has given the Australian stocks some pre-Christmas cheer, with energy and material stocks posted large gains.
    At the 4.15pm (AEDT) close, the benchmark S & P/ASX200 index surged 103.4 points, or 1.94 per cent, to 5,442 points, while the broader All Ordinaries index climbed 101.4 points, or 1.91 per cent, to 5141.1 points.
    Energy stocks led the charge, with shares in energy giant Woodside Petroleum up 2.46 per cent to close at $38.70, while Santos climbed 6.38 per cent to $8.50.
    However, Macquarie Private Wealth division director Martin Lakos said that energy stocks were “very oversold”, and their gains must be put into perspective.
    “Obviously Santos made an announcement in regards to its capital expenditure, the sale of its coal seam gas interests. These are viewed as more positive moves, so that’s why these stocks are recovering,” he said.
    “We have to put in perspective that they’ve fallen over 40 per cent, so very oversold, and you’d expect them to rebound and recover and to some extent restart a process of consolidation.”
    He added that oil prices could be set for further rebounds, but “it will take a little while for high-cost production to be cut from the system”.
    Conversely, one of the day’s biggest losers was outdoor retailer Kathmandu, which lost more than 22.35 per cent to close at $2.06 after a profit downgrade.
    Mr Lakos said that the savings ratio was at highs not seen since 1986, with many households opting to pay down debts rather than spend.“It will be interesting to see whether consumers become more active in this Christmas period. There’s no doubt that while consumer confidence is still fairly flat, the consumer is very much subdued in their activity,” he said.
    “Hopefully the retailers have a better Christmas, but one suspects consumer confidence is not there enough to see a big spending surge come through.”
    In consumer staples, Woolworths rose 2.07 per cent to $30.62 and rival Wesfarmers gained 1.53 per cent.
    In financial stocks, NAB posted a 1.62 per cent rise to $33.19, Commonwealth Bank firmed 1.96 per cent to $85.35 and ANZ inched up 1.29 per cent to $32.09. Westpac gained 1.6 per cent to close at $33.00.
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