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Australia shares rally as investors take Fed hike in stride
December 17, 2015 / 1:55 AM / 2 years ago

Australia shares rally as investors take Fed hike in stride

SYDNEY/WELLINGTON, Dec 17 (Reuters) - Australian shares jumped 1.4 percent on Thursday, joining in a global equities rally as investors welcomed the U.S. Federal Reserve’s first rate hike in a decade as a sign of confidence in in the world’s largest economy.

The S&P/ASX 200 index rose 67.95 points to 5,096.4 by 0106 GMT. The benchmark rose 1.9 percent on Wednesday after previously bouncing off a 2-1/2 year low.

“We’ve seen a real expression of confidence in the world’s largest economy,” said Michael McCarthy, Chief market Strategist, CMC Markets.

“If we are to have a Santa rally on average it starts on the 15th December, we might have started one day late but it does look like we’ve got positive momentum heading into year end.”

The major banks rallied with Westpac Bank and National Australia Bank each gaining over 2 percent, while Commonwealth Bank rose 1.7 percent and ANZ Bank up 1.8 percent.

The upbeat mood also drove gold miners higher with Newcrest Mining up 2.1 percent while Northern Star and Evolution jumped over 4.0 percent each.

Persistent worries about a supply glut in oil put pressure on energy stocks.

Santos fell down 1.5 percent and Woodside Petroleum was off 0.7 percent.

U.S. stocks rallied after the Fed’s rate hike, which was a decade in the making and signaled policymakers’ confidence in the world’s no. 1 economy. Markets welcomed Fed Chair Janet Yellen’s assurance that future tightening would be “gradual” and dependent on inflation finally moving higher as long forecasted.

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New Zealand’s benchmark NZX 50 index was relatively flat on Thursday, edging up 0.1 percent or 5.760 points to 6,076.700.

The subsidiares of Australian banks were among the biggest gainers with ANZ <ANZ > rising 2.6 percent and Westpac up 1.11 percent.

Fast food operator Restaurant Brand rose 0.9 percent after announcing sales for the company had risen in the third quarter.

Telecommunications infrastructure provider Chorus led losses, falling 2.6 percent as investors continued to take profits. The stock had soared 23.87 percent in the previous session on the news that New Zealand’s competition regulator had decided the company could charge retail telecommunication companies more to access its infrastructure.

Editing by Shri Navaratnam

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