The share market has ended a tumultuous week with another gain, thanks to strength among financial, energy and resources companies amid optimism President-elect Donald Trump’s infrastructure spending and tax cuts will stimulate the US economy.
The benchmark S&P/ASX 200 index jumped 0.8 per cent on Friday, backing up its massive gain of 3.3 per cent on Thursday.
Those gains came after a 1.9 per cent fall on Wednesday as the presidential vote unfolded, and helped the market post a rise of 3.7 per cent for the week, its best since mid-July.
CommSec market analyst Steven Daghlian said investors are focusing on Mr Trump’s policies now the election is over.
“The fact that he’s looking to cut the company tax rate substantially, he’s looking at spending twice as much as Hillary Clinton on infrastructure, deregulation, a stronger dollar, bringing profits back into the US, these are all things that the market has responded well too,” Mr Daghlian said.
“How long it will last is obviously unknown at this stage.”
Mr Trump is still 10 weeks out from taking office, and uncertainty surrounds what policies he will pursue.
“So now we’ll probably have this period of volatility as markets start to price in what a Trump presidency might look like,” Mr Daghlian said.
Rio Tinto added $1.42 to $59.55 and BHP Billiton was up 52 cents at $24.94 on the back of higher commodity prices, driven by expectations that Mr Trump’s election-night pledge to build new roads, bridges and tunnels will boost demand.
The materials index climbed to its highest level since May, 2015 as the election-week spike capped a year-long steady climb.
The financial sector was the strongest performer on Friday, as the big four banks soared.
Commonwealth Bank jumped $2.52, or 3.4 per cent, to $75.78, National Australia Bank rose $1.11, or 4.2 per cent, to $27.80, Westpac added 95 cents, or 3.1 per cent, to $31.91 and ANZ gained 71 cents, or 2.6 per cent, to $28.30.
Investment bank Macquarie Group surged $1.69, or 2.1 per cent, to $81.97, while insurers AMP, Suncorp and Insurance Australia Group rose by between 1.1 and 1.5 per cent.
Energy giant Woodside Petroleum rose 27 cents to $28.99, despite oil prices falling overnight, while Santos jumped 23 cents, or 6.4 per cent, to $3.81 after the oil and gas producer confirmed Chinese private equity firm Hony Capital had increased its stake.
KEY FACTS:
*The benchmark S&P/ASX 200 index was up 41.9 points, or 0.79 per cent, at 5,370.7 points.
* The broader All Ordinaries index was up 37.7 points, or 0.70 per cent, at 5,446.6 points.
* The December share price index futures contract was up 25 points at 5,366 points, with 49,711 contracts traded.
* National turnover was 3.9 billion securities traded, worth $8.9 billion.
