The Australian share market bounced back on Friday as traders decided the economy is doing better than a preceding three-day run of losses would suggest.
The market finished strongly to be more than 1.7 per cent up for the day after a 1.2 per cent fall on Thursday.
CMC Markets senior trader Tim Waterer said investors had over-reacted in pushing prices down on Thursday, when the best jobs data in more than a decade was interpreted as bad news by denting the chance of more interest rate cuts.
“I think the selling on Thursday was overdone so a lot of the buying we’re seeing is making up some of the losses yesterday,” he told AAP.
“It was a counter-intuitive move downwards.”
Traders in Australia and across Asia were also encouraged by good employment numbers in the US overnight, which sent the Dow Jones Industrial Average to its longest winning streak since November 1996.
Friday’s rise on the ASX was fuelled by a strong performance by banks and retail stocks.
National Australia Bank added 38 cents, two per cent, to $31.30, ANZ advanced 54 cents to $28.72, Commonwealth Bank put on $1.30 to $70.18 and Westpac was the stand-out, rising 76 cents, or 2.52 per cent, to $30.89.
Among retailers, Wesfarmers climbed $1.04, or 2.5 per cent, to $43.12, and Woolworths lifted 93 cents, or 2.65 per cent, to $36.05 and JB Hi-Fi improved by 1.55 per cent, to $15.08.
Mining stocks bounced back, improving by more than one per cent after being belted on Thursday and despite the iron ore price falling heavily overnight.
Global miner BHP Billiton closed up 46 cents at $35.55, Rio Tinto lifted 60 cents to $61.30 while Fortescue Metals was nine cents up at $4.06.
KEY FACTS
*The benchmark S&P/ASX200 index was up 88 points, or 1.75 per cent, at 5,120.2 points (down 0.06 per cent for the week)
*The All Ordinaries index was up 85.5 points, or 1.7 per cent, at 5,129.3 points (down 0.16 per cent for the week)
*The March share price index futures contract was 92 points higher at 5,122 points, with 52,924 contracts traded.
*National turnover was 2.57 billion securities worth $6.19 billion.
