Stocks book third straight close in the black

The local market has added more than 0.5 per cent as materials spiked in the wake of the Fed.

The Australian sharemarket has surged to its third straight positive close after investors welcomed central bank updates from the US and Japan and were unperturbed by mixed messages from new RBA Governor Philip Lowe.

At the closing bell, the benchmark S&P/ASX 200 index had jumped 34.9 points, or 0.65 per cent, to 5,374.5, while the broader All Ordinaries index lifted 36.9 points, or 0.68 per cent, to 5,466.3.

The gains were driven by the materials sector as investors viewed a weakening US dollar and positive talk around US economic growth as a boon for commodities.

CMC Markets chief market analyst Ric Spooner said a “risk premium” was being unwound after investors fretted last week that tighter monetary policy was imminent.

“While a Fed rate rise in December is likely, there is at least some risk that events may conspire to move out to next year, further slowing the outlook for higher rates,” he said.

“Markets also have increased comfort that, when they do occur, the pace of rate increases is likely to be pretty glacial for the medium term.”

Mr Spooner warned, however, the positive initial response could fade as traders weigh the impact of a rising currency.

“The stronger Australian dollar will be a dampener for some sectors of the market over coming days.”

For now, the rising currency has not impacted the showing among resources stocks, with a strong rise in gold and crude prices and lift in iron ore futures driving heavy bids all around.

Mining giant BHP Billiton leapt 2.7 per cent to $21.28, key rival Rio Tinto bounded 3.3 per cent to $49.20 and iron ore miner Fortescue rocketed 5.5 per cent to $5.16.

In energy, Santos surged 2.8 per cent to $3.69, Origin advanced 3.7 per cent to $5.05 and Woodside rallied 2.1 per cent to $27.35.

Gold miners outpaced allcomers, with Newcrest jumping 6.9 per cent and Regis Resources putting on 4.7 per cent.

The big banks lagged, with flat results for the big four aside from NAB’s modest 0.1 per cent rise.

Among other blue chips, Telstra added 0.8 per cent to $5.09, while Qantas inched up 0.3 per cent to $3.18.

Elsewhere, Solomon Lew’s Premier Investments dipped 2 per cent as profit numbers fell marginally short of market hopes, Brickworks lifted 1.3 per cent on a sharp lift in underlying earnings and Washington H. Soul Pattinson closed unchanged after delivering a steady earnings update.

In telecommunications, this week’s market stragglers TPG Telecom and Vocus rallied 3.4 and 2.8 per cent respectively, after the latter gave a reassuring update on its start to fiscal 2017.

Meanwhile, the Australian dollar edged up US76.4c as a speech from new RBA Governor Philip Lowe was viewed straying to the hawkish side, although his comments did little other than consolidate the currency’s strong rally in offshore trade.