The Australian share market has closed higher after the US Federal Reserve kept interest rates in the US on hold.
CMC Markets chief market analyst Ric Spooner said low interest rates tend to support share markets.
“I think the main reason (for the rise in the Australian market) is what the US Fed decided to do or not to do last night,” Mr Spooner said.
The US Federal Reserve overnight held its key interest rate near zero, citing a weak global economy, low inflation and unsettled financial markets.
But US Fed chair Janet Yellen indicated rates still may rise this year.
Mr Spooner said, however, that inflation in the US appeared unlikely to increase by much over the rest of 2015, so interest rates in the US may be kept on hold until early in 2016.
“For equities, that’s a mild positive,” Mr Spooner said.
“It leaves more of a `Goldilocks situation’ where you’re getting some growth in the US economy and ongoing low interest rates which supports valuations (of shares).
“I think that’s why we’re seeing support for the banks and yield stocks here today.”
On the local bourse, among the major banks, the Commonwealth Bank rose 24 cents to $75.83, National Australia Bank lifted 13 cents to $31.06, Westpac gained 40 cents at $31.75, and ANZ ascended 22 cents to $28.40.
In the resources sector, global miner BHP Billiton fell 19 cents to $24.46, Rio Tinto lost 75 cents to $51.26, and Fortescue Metals eased three cents to $2.06.
Origin Energy was 25 cents lower at $7.06 after it flagged lower earnings from its key Australia Pacific LNG project because of weak oil prices.
Shares in credit information provider Veda Group soared 62.5 cents, or 31.33 per cent, to $2.62 on news of a $2.28 billion takeover proposal from Equifax Inc.
Retailer Premier Investments was down 37 cents at $11.79 despite making a net profit of $88.1 million in the 12 months to July 25, up from $73 million a year ago.
SeaLink Travel Group jumped 29 cents, or 10.47 per cent, to $3.06. SeaLink is set to become Australia’s largest marine tourism and transport company through its acquisition of Transit Systems Marine for $125 million.
KEY FACTS
* On Friday, the benchmark S&P/ASX200 index was up 23.7 points, or 0.46 per cent, at 5,170.5 points.
* The broader All Ordinaries index was up 23.1 points, or 0.45 per cent, at 5,194.3 points.
* The December share price index futures contract was up 41 points at 5,148 points, with 37,302 contracts traded.
* The price of gold in Sydney at 1700 AEST was $US1,128.30 per fine ounce, up $US7.90 on Thursday’s price of $US1,120.40.
* National turnover was 2.4 billion securities worth $6.6 billion.
