‘Mojo back’ as market rallies

Volatile … the ASX has had a recent run of big swings. Photo: Tamara VoninskiHow the day developed: Markets Live

Australian shares shot up in what market watchers hope is a sign investors are over their jitters caused by the US flagging a cut to its stimulus program.

The benchmark S&P/ASX 200 index gained 72.2 points, or 1.5 per cent, to 4881.7, the highest close since June 4, while the broader All Ordinaries rose 68.9 points, or 1.4 per cent, to 4866.5.

The benchmark index extended gains despite the fact that China’s annual consumer inflation quickened more than expected and local business conditions weakened sharply in June.

The Australian market has been volatile for the past week on concerns about the US Federal Reserve’s plans to curtail its stimulus later this year, and on signs of slowing growth in China.

But it has now recovered all of the heavy losses incurred in the three days after the Fed indicated it may soon begin tapering.

The ASX200 had moved through a trading range of plus or minus 1.3 per cent in all of the past seven sessions, and 10 of the past 12, IG Markets strategist Chris Weston said.

‘‘There is a clear war of attrition between the bulls and the bears at present, and generally you get heightened volatile when disagreement occurs,’’ Mr Weston said. ‘‘However, having printed a higher high we’d say the bulls probably have the upper hand right now.

‘‘It seems equities have got their mojo back.’’

Westpac shares were up 61 cents at $28.95, NAB gained 55 cents to $29.42, ANZ added 53 cents to $28.66 and Commonwealth was $1.15 higher at $70.14.

Macquarie Group also performed well, adding $2.03, or 4.9 per cent, to $43.51.

Among the miners, BHP shares were up 66 cents at $31.61 and Rio Tinto was 40 cents higher at $52.04.

But shares in major gold miner Newcrest Mining were down 16 cents at $9.74, continuing its bad run as the price of the precious metal falls.

Telstra also fell, losing three cents to $4.76.

BusinessDay with agencies

The original release of this article first appeared on the website of Hangzhou Night Net.

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