ASX closes firmly in the black
Forecast beating employment data sent the Australian sharemarket and the dollar sharply higher but the stock buying momentum waned as rate cut hopes faded.
The S&P/ASX 200 index jumped to a 0.9 per cent gain at its peak but it slipped to close up 39.1 points, or 0.66 per cent, at 5947.5 as doubt lingered over the accuracy of the data.
The ABS reported the economy created 37,700 mostly full time jobs last month and February’s data was revised sharply higher, while the unemployment rate dropped to 6.1 from 6.3 per cent, but after months of revisions economists advised waiting for further confirmation of an improved employment trend.
Westpac economist Justin Smirk said the data was a “robust print” with a focus on job creation in NSW with softer outcomes in Vic and Qld but changes to underlying seasonality raised questions on “just how robust a print it is”.
Trading around US76.70¢ the Australian dollar was already well off yesterdays low of US75.75¢, but it rallied further, hitting a high of US77.80¢, before settling at US77.45¢.
Government 10-year yields jumped 9.2 points to 2.374 per cent.
“From a monetary policy perspective, today’s data throws some doubt on the consensus view that the RBA is going to pull the trigger again in May,” Commonwealth Bank economist Gareth Aird said.
Despite a week of dismal data the Shanghai composite index bounced almost 2 per cent at the close of the ASX to within a few points of its seven-year high.
In Tokyo the Nikkei index remained stuck in a tight band with a 0.2 per cent loss.
Spot iron ore fell 0.9 per cent to $US50.33 a tonne while Dalian iron ore futures were up one per cent.
Brent crude oil jumped per cent to $US62 a barrel after Iran joined Libya in calling for OPEC nations to reduce production to relieve the supply glut.
“It was always going to be a case of the good news being bad news for the market,” OptionsXpress market analyst Ben Le Brun said.
The big miners held the market in positive territory, due to a jump in crude oil and base metals prices.
“It’s certainly helping the energy sector; for the big miners ... it’s more a sentiment driver than anything,” Mr Le Brun said.
Commonwealth Bank still managed to add 57 cents to $93.01, ANZ gained eight cents to $36.02, National Australia Bank rose 28 cents to $39.31 and Westpac closed 35 cents higher at $39.27.
BHP Billiton added 72 cents to $30.23, Rio Tinto edged four cents higher to $55.87 and Fortescue Metals soared 10 cents, or 5.4 per cent, to $1.955 after reducing its costs in the three months to March.
Oil and gas producer Woodside Petroleum added seven cents to $35.48 and Santos was 21 cents higher at $7.93.
Nine Entertainment gained eight cents, or 3.7 per cent, to $2.23 after selling its Nine Live business, which includes Ticketek, and promising higher returns to shareholders.
The broader All Ordinaries index was up 40.3 points, or 0.69 per cent, at 5917.6 points.
The June share price index futures contract was up 42 points at 5941 points, with 23,321 contracts traded.
National turnover was 1.5 billion securities worth $4.2 billion.
