Buyers return to energy stocks

THE Australian share market regained some of Wednesday’s big losses with gains for the banking, energy and materials sectors leading the recovery.

The benchmark S&P/ ASX200 gained 40.3 points, or 0.71 per cent, to 5706 points, after falling back to where it started the year in Wednesday’s session when sliding oil prices and commodities uncertainty helped wipe $26.5 billion off the market’s value.

After another 2 per cent fall in West Texas crude overnight, CMC Markets chief market strategist Michael McCarthy said energy drove much of the market’s gains.

“Wednesday’s sell off really went too far,” Mr McCarthy said.

“Falls were relatively mild elsewhere, in Europe and in the States, but locally energy stocks were really belted.”

At the close yesterday Santos and Origin had both gained more than 1 per cent to $2.95 and $6.90 respectively, Woodside was up three cents at $29.32 and Oil Search was 2.2 per cent higher at $6.60.

Mr McCarthy said it was a surprisingly strong day of trade across the board with a good deal of technical buying.

“I think we were expecting positive momentum but after mild leads overseas the overall gain has taken many analysts by surprise with a very good mix.”

Aussie miners continued to climb following a rise in commodity prices, including iron ore, with Rio Tinto up 37 cents to $58.37 and BHP Billiton inching ahead five cents to $22.15.

Fortescue Metals climbed 3.8 per cent to $4.69.

Elsewhere, banks again led the broader recovery with Westpac, Commonwealth Bank, ANZ and National Australia Bank all gaining between 1.2 per cent and 1.4 per cent.

“That’s very good support again after banks were sold down and they have made a return to value after getting hit hard,” Mr McCarthy said.

The Australian dollar was relatively unchanged from Wednesday, valued at 75.54 US cents last night.