The Australian share market has made a surprise shift upwards as resources and gold stocks benefited from a stronger price for iron ore, a spike in the gold price and expectations of an improvement in oil prices.
IG market strategist Evan Lucas said it was surprising that Australian shares went up on Monday when Asian markets were weaker and US markets had retreated on Friday after disappointing US jobs figures.
Resources and gold stocks led the way higher.
“That’s on the back of iron ore holding the line, and the oil price now thinking about going through $US50 a barrel,” Mr Lucas said.
Mr Lucas said the weaker jobs figures in the US had pulled back expectations of an interest rate rise in the US, which had weighed on the US dollar and pushed up the gold price.
Mr Lucas said the Reserve Bank of Australia’s outlook on inflation and the potential impact of interest rates would be an influential determinant of direction in the near term.
In the resources sector, global mining giant BHP Billiton was up 69 cents at $19.22, Rio Tinto climbed $1.68 to $45.22, and Fortescue Metals advanced 13 cents to $3.21.
Gold miner Newcrest surged $2.30, or 11.64 per cent, to $22.06.
Among the major banks, Commonwealth Bank was 85 cents richer at $76.60, Westpac rose 30 cents to $30.26, National Australia Bank gained 14 cents to $26.62, but ANZ eased 13 cents to $24.96.
Engineering form UGL plunged $1.15, or 33.33 per cent, to $2.30 after flagging potential higher provisions over client-related delays in its construction work for the Ichthys LNG project near Darwin.
KEY FACTS:
* On Monday, the benchmark S&P/ASX 200 index was up 41.5 points, or 0.78 per cent, at 5,360.4 points.
* The broader All Ordinaries index was up 38.5 points, or 0.71 per cent, at 5,431.0 points.
* The June share price index futures contract was up 40 points at 5,363 points, with 30,703 contracts traded.
* The spot price of gold in Sydney at 1700 AEST was $US1,241.70 per fine ounce, up $US29.30 from $US1,212.40 on Friday.
* National turnover was 2.74 billion securities traded, worth $4.78 billion.
