The share market has closed at its highest level in a month after major oil producers surprisingly agreed to cut production, giving energy and resource stocks a boost.
The benchmark S&P/ASX 200 index rose 1.1 per cent to 5,471.3 points, its highest level since August 30.
An unexpected announcement from the Organisation of the Petroleum Exporting Countries (OPEC) that it will cut oil production for the first time in eight years gave global oil prices a major boost overnight.
“Markets were not expecting a huge policy shift from OPEC and this means potential oil price upside,” ThinkMarkets senior market analyst Matt Simpson said.
“Because no one was expecting this, it has not been priced into the market and that’s why investors are not holding back in buying up energy stocks – the ASX has benefited from this tremendously.”
Woodside Petroleum jumped 7.3 per cent, or $1.93, to $28.45, Santos lifted 7.6 per cent, or 26 cents, to $3.67 and Oil Search rose seven per cent, or 46 cents, to $7.00.
BHP Billiton bounced 4.7 per cent, or $1.01, to $22.40 and Rio Tinto rose 3.7 per cent, or $1.85, to $51.85.
If US inflation data out on Thursday night, Australian time, was strong, global risk sentiment could be further boosted and the S&P/ASX 200 could rise above 5,500 points on Friday, Mr Simpson said.
KEY FACTS:
* At 1615 AEST, the benchmark S&P/ASX 200 index was up 58.9 points, or 1.09 per cent, at 5,471.3 points.
* The broader All Ordinaries index was up 58 points, or 1.05 per cent, at 5,558.2 points
* The December share price index futures contract was up 52 points at 5,453 points, with 25,687 contracts traded.
* National turnover was 2.9 billion securities traded, worth $5.5 billion.
