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MELBOURNE - The Australian share market finished around five per cent stronger - its best performance in almost two weeks, adding $51 billion to the value of stocks today on expectations that interest rates will be cut again tomorrow.
At the 1615 AEDT close today, the benchmark S&P/ASX200
index had advanced 203.5, or 5.06 per cent to 4221.5, while the broader All Ordinaries index was 190.3 points, or 4.78 per cent, stronger at 4173.
It was the biggest rise for both indices since October 13, and stocks reflecting consumer items and staples performed strongly .
On the Sydney Futures Exchange, the December share price index futures contract was 175 points, or 4.34 per cent, higher at 4,211 on a volume of 30,397 contracts.
The Reserve Bank of Australia (RBA) is widely expected to cut the overnight cash rate by 50 basis points after the bank's board holds its regular monthly meeting tomorrow.
It was the share markets' fourth consecutive stronger trading day and the strongest close since October 21, with the value of stocks comprising the All Ordinaries index increasing by $47 billion.
Macquarie Equities associate director Lucinda Chan said a good lead from Wall Street on Friday, combined with positive sentiment and the anticipation of another cut to interest rates tomorrow pushed the market into positive territory.
"The Australian dollar is also trading firmly at 68 cents as we speak which has added to an overall sense of confidence," she said.
Macquarie Group forecasts a 50 basis point cut from the RBA tomorrow.
Volumes were relatively light on the local bourse given the public holiday in Japan, Ms Chan.
Consumer staples were the standout sector today, with major stocks posting strong gains despite weak September household spending data, Ms Chan said.
"Their rises are unbelievable," she said.
Woolworths jumped $1.83 or 6.58 per cent to $29.63, while Wesfarmers leapt $2.88 or 13.41 per cent to $24.35 and Harvey Norman put on 12 cents or 4.65 per cent to $2.70.
The Australian Bureau of Statistics reported that the 1.1 per cent decline in retail sales on a seasonally adjusted basis during September was the biggest monthly fall since April 2005.
The slide came even though the RBA cut rates in September for the first time since late 2001, taking the cash rate in that month to seven per cent.
The major banks were also stronger, with National Australia Bank putting on $1.11, or 4.63 per cent, to $25.10, ANZ adding $1.14, or 6.57 per cent to $18.50.
Commonwealth Bank firmed $1.54 or 3.82 per cent to $41.84, and Westpac rose $1.19 or 5.87 to $21.47.
Australia's major miners also moved into positive territory, with BHP Billiton jumping $1.91, or 6.82 per cent, to $29.90 and rival Rio Tinto adding $4.40, or 5.67 per cent, to $82.00.
BHP says its expects to receive a "statement of objections" from the European Commission's competition regulators this week regarding its proposed bid for Rito Tinto.
BHP will have four weeks to reply to the commission about how it plans to overcome the objections.
Oil companies made gains also, with Oil Search firming 15 cents to $4.65, Santos up 49 cents, or 3.63 per cent, to $13.98 and Woodside Petroleum adding 53 cents to $42.41.
At 1633 AEDT spot gold was trading in Sydney at US$733.90 an ounce, up US55 cents on Friday's close of US$733.35.
Local gold stocks finished mixed, with Newmont Mining losing 17 cents, or 4.18 per cent, to $3.90 - one of the few stocks to lose ground on the sharemarket today.
Lihir Gold firmed five cents, or 2.56 per cent, to $2.00 and Newcrest Mining put on 44 cents, or 2.12 per cent, to $21.24.
By 1640 AEDT national carrier Qantas was up 19 cents, or 7.85 per cent, to $2.61 and rival Virgin Blue Holdings was 4.5 cents stronger at 39 cents.
The Seven Network was the only major media stock to lose ground, falling 30 cents, or 4.8 per cent, to $5.95, while Fairfax Media firmed eight cents to $2.00 and News Corporation pushed $1.50, or 10.1 per cent, higher to $16.35.
News' non-voting scrip also surged $1.40, or 9.48 per cent, higher to $16.17.
Trading halts in Mirvac Group and Allco Finance were announced this morning.
Mirvac's move comes amid speculation that itc plans to buy distressed assets from fellow property trusts if a widely anticipated $300 million capital raising is successful.
Allco is awaiting a decision from its banking syndicate over whether to extend its debt repayment schedule.
Mirvac's shares closed on Friday at 98.5 cents, and Allco's last traded at 14 cents.
Mount Gibson Iron was the top traded stock, with 80.45 million shares changing hands worth $31.78 million.
Mount Gibson Iron said shareholder, Shougang Concord International Enterprises of China, would buy the bulk commodity from the company after several customers defaulted on binding offtake agreements last month.
Preliminary national turnover reached $1.29 billion shares worth $3.49 billion, with 697 stocks up, 287 down and 278 unchanged.
- AAP
