Australian share market bounces back in ‘impressive’ rally
The Australian share market bounced back in a rally that impressed analysts, but volatility is expected to continue until after the US election.
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The Australian share market staged a massive recovery after four straight trading days of losses dragged the bourse to a three-month low, with tech and industrial companies among the winners.
Following a rebound on US and European stock exchanges, the S&P/ASX200 leapt 2.42 per cent to 5923.9 – the best level it has closed at since September 16 – while the All Ordinaries Index jumped 2.31 per cent to 6111.3.
ThinkMarkets Australia analyst Carl Capolingua said it was big, broad-based rally, with an abrupt shift in focus away from watching the recent Nasdaq correction and the impact of a second wave of COVID-19 infections in Europe.
“I haven’t seen a session where every sector was up over 1 per cent in a very long time,” Mr Capolingua said.
“Nine stocks in the ASX 200 were up for each stock that fell. That’s impressive.
“I’d love to see it continue and for us to really stamp out a major low here, but there are still so many unknowns – the US presidential election, UK and Europe infections resurgence and China-US tensions.
“It’s hard to see us blowing through key resistance at 6000 in the really short term.”
RBS Morgans director of equities Bill Chatterton said volatility would continue until after the US election.
One of the best performers was Service Stream, which maintains assets for utilities and telecommunication companies. Its shares leapt 14.04 per cent to $2.03.
Despite booking a massive full-year net loss, shares in seeds and crop protection company Nufarm finished 4.3 per cent stronger at $4.34.
There was no announcement from car dealer Eagers Automotive Group, but its shares rose 7.05 per cent to $9.72.
Mr Capolingua said the Aussie dollar was sold off after Reserve Bank deputy governor Guy DeBelle’s speech on Tuesday was widely interpreted as dovish, sparking talk of a 0.1 per cent rate cut.
He said that provided some extra support for miners and other overseas earners like CSL and Cochlear, which were up 3.79 per cent to $297.21 and 4.2 per cent to $202.24, respectively.
Rio Tinto put on 0.52 per cent to $97.50 and BHP added 1.31 per cent to $37.15.
Some gold shares were sold off after prices for the precious metal slipped overnight. Ramelius sank 7.3 per cent to $2.16, Northern Star retreated 2.09 per cent to $13.61 and Resolute lost 1.58 per cent to 93.5 cents.
Non-bank lender Plenti made a poor ASX debut, with its shares closing at $1.30, down from its $1.66 issue price.
ANZ gained 2.37 per cent to $16.85, Commonwealth Bank appreciated 1.9 per cent to $64.27, National Australia Bank lifted 2.88 per cent to $17.12 and Westpac shed 2.12 per cent to $16.39.
The Aussie dollar was fetching 71.23 US cents, 56.12 British pence and 60.97 Euro cents in afternoon trade.
Originally published as Australian share market bounces back in ‘impressive’ rally