The Australian share market ended the week on a high note after Greek Prime Minister George Papandreou said plans to put a European financial rescue plan to a referendum may be abandoned.
Global markets also rallied overnight on news of a surprise interest cut by the European Central Bank of a quarter of a percentage point, while stronger commodity prices helped boost the domestic bourse.
The benchmark S&P/ASX200 index was up 109.3 points, or 2.62 per cent, at 4,281.1, whilethe broader All Ordinaries index gained 105 points, or 2.48 per cent, to 4,342.5.
On the ASX 24 at 1644 AEDT, the December share price index futures contract was 102 points higher at 4,285, with 33,290 contracts traded.
Mr Papandreou, who faces a confidence vote in parliament, said he was prepared to drop the referendum on the debt-laden nation’s bailout plan in order to reach a deal with the opposition leader on a national unity government.
IG Markets institutional dealer Chris Weston said it was positive the Greek debt issue was being addressed but the devil was in the detail.
“How are they going to do this?” Mr Weston said.
“Greece has no growth policies out there at all. “It’s all about austerity.
“At what stage do Italy, Portugal and Ireland ask for 50 per cent (debt) write-offs as well?”
Mr Weston said investors had heightened expectations of positive US non-farm payroll figures overnight.
“All the leading indicators that we’ve seen for non-farms suggest that we’re going to get a good number tonight,” he said.
Mr Weston said there was only modest selling after the Reserve Bank of Australia lowered its inflation outlook and warned Australia’s economy could be dragged down by Europe’s sovereign debt crisis.
“The market was pretty well prepared for that.
“It’s one of the reasons they cut (interest) rates on Tuesday.”
The materials and energy sectors led the gains following a return of risk appetite among investors.
Among the major miners, Rio Tinto was up $3.52, or 5.3 per cent, at $69.97, BHP Billiton advanced $1.41, or 3.86 per cent, to $37.95 and Fortescue Metals jumped 37 cents, or 7.86 per cent, to $5.08.
Rio Tinto chairman Jan Du Plessis told a business function in Sydney that he couldn’t see European leaders coming up with a sustainable solution to the region’s financial problems.
In the energy space, Santos was up 44 cents, or 3.47 per cent, at $13.12, Woodside was 47 cents, or 1.3 per cent, higher at $36.67 and Oil Search had added five cents to $6.43.
The big four banks were all stronger.
Westpac was the best performer, appreciating 57 cents, or 2.65 per cent, to $22.08, ANZ was up 53 cents, or 2.59 per cent, at $21.02, Commonwealth Bank found $1.02 to $49.03 and National Australia Bank improved 52 cents to $25.19.
Making headlines on Friday, Qantas chief executive Alan Joyce told a parliamentary inquiry that proposed legislative changes would limit the airline’s plans to expand into Asia and, as a result, would cost jobs.
Qantas shares were up four cents, or 2.54 per cent, at $1.615.
National turnover was 1.6 billion shares worth $4.5 billion, with 699 stocks up, 313 down and 375 steady.
