Australian stocks advance 4.5% over the week
Australian shares surged 4.5% higher over the week, led by a huge rebound in the resources sector following heavy selling last week.
The S&P/ASX 200 index chalked up gains on all five days of the week, adding 227.7 points to end Friday at 5,279.7.
From the lowest intraday level last week to the highest this week, the ASX 200 index had an increase of 7%, which CommSec market analyst Tom Piotrowski described as a “huge improvement”.
“This is like a typical bear market rally. While it’s encouraging to see that the market has consolidated after those big sell-offs, there’s still cause for caution.
“The mindset of the market remains quite fickle. The question now is whether or not that buying momentum can be sustained. Next week, maybe we’ll see a moderation of that momentum,” he said.
The fact that stock markets in mainland China were closed from 1 to 7 October for National Day celebrations may have eased volatility in the Australian market, Piotrowski pointed out.
“We may see a little more volatility in the picture next week,” he said.
Resources stocks jump
Resources companies, comprising energy and mining stocks, led gains in the ASX 200 index this week.
The S&P/ASX 200 Energy Index surged 14.6% over the week, led by Santos, Beach Energy and Liquefied Natural Gas. All 13 stocks in the energy index climbed during the week.
Santos skyrocketed 42%, while Beach Energy jumped 33% and LNG gained 29%, as Brent crude oil rose 12% over the week to US$53.90 a barrel at 4:30pm AEDT on Friday.
“Oil markets remain very well supplied. All the fundamentals around these markets still don’t point to the turning point you’ve seen in the prices,” said Piotrowski.
Meanwhile, the S&P/ASX 200 Materials Index climbed 10.3% weekly, with Fortescue Metals and Independence Group among its top gainers.
Fortescue advanced 24% while Independence Group jumped 22%.
BHP Billiton, which has the heaviest weighting in the index, surged 13% to $25.60.
Macquarie, BOQ rise
Macquarie rose 6.1% to $80.94. The banking group said it expects to post a 55% growth in earnings for the six months to the end of September, higher than its previous estimate of a 40% increase.
Bank of Queensland rose 10.7%, leading gains among financial stocks, after the company reported an all-time high annual profit of $318m.