Recovery may not last, say investors
THE Australian sharemarket finished the week in the black thanks to positive global leads and higher oil prices but investors worry the recovery could be short-lived.
The ASX 200 climbed 30.3 points to 5263.6 yesterday, following a second consecutive day of gains on Wall Street.
After taking into account Monday’s 4.1 per cent plunge, the ASX 200 finished the week up less than 1 per cent.
But the benchmark index still remains 7.6 per cent down for the month and 11.3 per cent off its April peak this year.
CMC Markets analyst Rick Spooner said the market opened strongly but could not maintain its momentum.
“There appeared to be a bit of book-squaring and potentially some profit-taking,” he said. “There’s still some nervousness in the market.
“Even though the rally over the last few days has given people comfort, the downward moves have been very large and it’s possible we are looking at volatile swings.”
Energy stocks were the star performers yesterday following a 10 per cent gain in the price of oil, which h rose back above e $US40 a barrel el after strong US S economic growth h data lifted confidence about the world’s biggestt economy and pet- roleum user. On Wall Street,
t the Dow Jones Industrial Average rallied 2.27 per cent on the back of better-than-expected US gross domestic product data.
The US economy expanded at an annual rate of 3.7 per cent in the June quarter, outpacing the rest of the developed world and lifting confidence that it will remain sturdy in coming months.
President Barack Obama (pictured) took note of the good GDP report, saying it showed the US remains “an anchor of global strength and stability” with an economic recovery that has been faster and stronger than most other nations.
The exuberance flowed through to the Chinese market, with the Shanghai Composite rallying 4.8 per cent.
On the local bourse, energy stocks were among the best performers. The ASX’s top stock was Liquefied Natural Gas, which rallied 12 per cent to $2.89. Woodside Petroleum gained 1.8 per cent to $32.05, Santos 5.6 per cent to $5.30 and Oil Search 5.9 per cent to $6.77.
Investors also ploughed back into resource heavyweights Rio Tinto and BHP Billiton which rose 4.7 per cent to $51.10 and 5.9 per cent to $25.49, respectively.p vely
Elsewhere IO IOOF shares we were 1.7 per ce cent higher at $9.11 after theth companypa predicted strong growthgr for theth superannuationan industry.in