Big market gains after central banks help euro
(2 December 2011 – Global) On Thursday the world’s six major central banks moved to tame a liquidity crunch for European banks, by providing cheaper US dollar funding.
The US Federal Reserve, the European Central Bank and the monetary authorities of the United Kingdom, Canada, Japan and Switzerland all said they were cutting the cost of emergency US dollar funding to ease strains on financial markets.
Shares quickly rose throughout the world, all sub-indices closed higher, but the market's gains were driven by the materials sector, which soared 3.9 percent. Financials gained 2.4 percent.
The rise added about A$30 billion to the value of the market, which has risen 6 percent since last Friday's dive below 4000 points.
The market rallied on Thursday morning after top central banks agreed overnight to lower the cost of existing dollar swap lines to European banks in an effort get a grip on the euro zone debt crisis.
Australian investors were also encouraged after China, the biggest consumer of Australian resources, cut reserve requirements for its commercial lenders for the first time in nearly three years.
Banks rallied, led by a 3.3 percent rise in National Australia Bank (NAB) while top miners BHP Billiton and Rio Tinto both gained over 4 percent.
Newcrest Mining added 3.2 percent after gold prices rose nearly 2 percent overnight, posting its biggest three-day rally in more than a month.
Spotless Group rallied 4.8 percent after it decided to pursue talks with private equity suitor Pacific Equity Partners, after it offered A$2.68 a share, 5 cents above its initial offer.
Virgin Australia rallied 2.9 percent to 35 cents after the competition watchdog approved plans by Virgin and Singapore Airlines to enter a network alliance.
Shares quickly rose throughout the world, all sub-indices closed higher, but the market's gains were driven by the materials sector, which soared 3.9 percent. Financials gained 2.4 percent.
The rise added about A$30 billion to the value of the market, which has risen 6 percent since last Friday's dive below 4000 points.
The market rallied on Thursday morning after top central banks agreed overnight to lower the cost of existing dollar swap lines to European banks in an effort get a grip on the euro zone debt crisis.
Australian investors were also encouraged after China, the biggest consumer of Australian resources, cut reserve requirements for its commercial lenders for the first time in nearly three years.
Banks rallied, led by a 3.3 percent rise in National Australia Bank (NAB) while top miners BHP Billiton and Rio Tinto both gained over 4 percent.
Newcrest Mining added 3.2 percent after gold prices rose nearly 2 percent overnight, posting its biggest three-day rally in more than a month.
Spotless Group rallied 4.8 percent after it decided to pursue talks with private equity suitor Pacific Equity Partners, after it offered A$2.68 a share, 5 cents above its initial offer.
Virgin Australia rallied 2.9 percent to 35 cents after the competition watchdog approved plans by Virgin and Singapore Airlines to enter a network alliance.
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