Trevor Chappell
(Australian Associated Press)
The Australian share market turned around Wednesday’s US election-induced retreat to stage a $50 billion rebound on Thursday as investors speculate that Donald Trump’s presidency could boost the US and global economies.
Australia’s benchmark S&P/ASX 200 index closed more than three per cent higher on Thursday, in marked contrast to Wednesday when $32.5 billion was wiped from the market as it became clear Mr Trump would defeat his rival Hillary Clinton in the presidential vote.
Sentiment changed as investors reconsidered a Trump presidency, speculating it could lead to economic reform that would stimulate the US economy.
Confidence was restored among investors in the US and flowed through markets in Australia and across Asia on Thursday.
“What we’ve seen is just a turnaround essentially,” CMC Markets chief market analyst Ric Spooner said.
“Investors are focused on the possibility that the Trump government might actually be positive for stocks for a variety of reasons.”
However Mr Spooner warned the strong rise of the Australian market on Thursday was more of a volatile recovery rather than the start of an upward trend.
He said Mr Trump still had no policies, only policy directions, so there was a long way to go before anything became reality.
The Australian market last posted a daily gain of more than three per cent in October 2011, when it looked like there could be a solution to the European debt crisis.
Asian markets also rebounded on Thursday, including Japan, which rose more than six per cent cent after being hammered on Wednesday.
The local bourse was pushed up particularly by large gains among resource and health stocks and the big banks.
Global miner BHP Billiton rose $1.86, or 8.24 per cent, to $24.42, and Rio Tinto jumped $4.40, or 8.19 per cent, to $58.13.
Goldminer Newcrest fell $1.12, or 4.42 per cent, to $24.23 amid a brought selldown in safe-haven stocks and bonds.
Among the banks, Commonwealth Bank was up $2.37 or 3.3 per cent to $73.26, National Australia Bank lifted 90 cents or 3.5 per cent to $26.69, Westpac ascended $1.30 or 4.4 per cent to $30.96, and ANZ advanced $1.12, a 4.3 per cent rise, to $27.59.
In other equities news Australia’s largest steelmaking business, BlueScope, was $1.00, or 13.5 per cent, richer at $8.40 as it reaffirmed a strong growth in its earnings despite rising input costs.
And wine supplier Treasury Wine Estates climbed 76 cents, or 7.5 per cent, to $10.88 after it provided a bullish outlook at its annual general meeting.
KEY FACTS:
* On Thursday, the benchmark S&P/ASX 200 index was up 172.2 points, or 3.34 per cent, at 5,328.8 points.
* The broader All Ordinaries index was up 170.6 points, or 3.26 per cent, at 5,408.9 points.
* The December share price index futures contract was up 188 points at 5,340 points, with 62,414 contracts traded.
* National turnover was 3.1 billion securities traded, worth $8.8 billion.
