The Australian share market surged to its highest level since May 2008 as the Reserve Bank’s decision to cut interest rates propelled the S&P/ASX 200 index 4.1% higher.
It was the third consecutive week of strong gains for the index, which is already up 7.5% to 5,820 points in 2015.
There’s no doubt that it was the RBA’s rate cut that dominated the news this week and saw large flows of money into the share market, not least dividend paying stocks such as the banks.
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The financials sector rose 4.8%, led by Westpac and ANZ, which finished 6.9% and 5.9% higher respectively. CBA went up 4%, while NAB, which this week posted a 6% rise in quarterly cash earnings to $1.65bn, saw its shares climb 4.4%.
There was some better news for the struggling resources and energy sectors too. BHP Billiton shares climbed 8.1% and Rio Tinto’s rose 5.3% as the broader resources sector posted a 6.9% gain.
Energy stocks jumped 6.3% as the oil price showed signs of stabilising, although the sector remains down almost 20% over the past six months.