The day’s gains reflect further appetite for the riskier asset class, and come as the price of iron ore climbed higher, but the Australian dollar lost ground after the Reserve Bank of Australia governor called time out on gains in the currency by attempting to talk it down for the first time this financial year.
Mr Walsh said that if the US economy can stabilise at a 3 per cent growth rate, it will be supportive of a lower dollar and better prospects for local companies. BHP Billiton gained 1. 03 per cent to $37. 23, main rival Rio Tinto improved 0. 73 per cent to $62. 45, while iron ore miner Fortescue Metals Group performed well off the improved iron ore price, lifting 5. 23 per cent to $4. 63.
The dollar dropped half a cent on the governor’s intervention. “The Australian dollar is important at signalling policy domestically,” said Karara Capital investment manager Rohan Walsh.
The Australian Bureau of Statistics’ building approvals rose 9. 9 per cent in May on a seasonally adjusted basis compared to 3. 1 per cent forecast. “The RBA has policy ammunition to fire, but the economy has to weaken.
Building firm WorleyParsons was the best performing stock of the day up 6. 28 per cent, to $18. 61, after Bank of America Merrill Lynch upgraded it to “buy”, expecting it to deliver on profit expectations, and as it is trading 20 per cent below its 10-year trend price.
The market benchmark S&P/ASX 200 Index closed 0. 66 per cent, or 35. 7 points, higher on Thursday at 5491. 1 points, the first time the market has made consecutive gains since June 10.
Australian retail figures fell by 0. 5 per cent, compared with unchanged market expectations, while building and construction improved substantially more than forecast.
Read more here: SMH