ASX Soars Following Wall Street Rally: US Jobs Data And Fed Rates Opinion

  • Jan 07, 2019 AEDT
  • Team Kalkine
ASX Soars Following Wall Street Rally: US Jobs Data And Fed Rates Opinion

Riding high on positive US employment data, strengthened wage growth and Fed’s interest rate opinion, Australian stocks rebounded from last week’s falling spree. Investor sentiments turned bullish following the Wall Street rally last Friday.

The benchmark index S&P ASX200 closed 1.1% higher at AUD 5683.2, the highest level since a month. The broader All Ordinaries index ended the day’s session at AUD 5744.5, enjoying a rally of 67.5 points or 1.2%.

The specific sectoral indices also closed in green with the XIJ (Technology sector Index) being the best performer, rallying by 2.7%. XEJ (Energy Sector) and XJR (Resources Sector) both soared by 2.34%. Even the XMJ (Materials sector Index) was lifted by 2.17% and XFJ (Financial sector Index) by 1.06%.  

The Dow Jones Industrial Average gained 3.3 % to close at $ 23,433 and the NASDAQ gained 4.3 % to close at $ 6739 on Friday. European markets also rebounded with FTSE gaining 2.2%, Paris 2.7% and Frankfurt 3.4%.

Emeco Holdings Limited (ASX: EHL) was the best performing stock on ASX 200 driving the local market higher. The industrial sector stock posted 10.29% gain, closing at $2.090, as compared to the previous close of $1.895. Syrah Resources Limited (ASX: SYR), belonging to the metal and mining sector, gained 9.7% ending the session at $1.685. Industrial player, Seven Group Holdings Limited (ASX: SVW) was the third-best performer demonstrating 8.5% growth at $14.82.

Mining giant BHP Group (ASX: BHP) closed at $34.39, up by 3%. Rio Tinto (ASX: RIO) soared 2.7%, settling at $78.90. Fortescue Metal Group (ASX: FMG) jumped 3.3 % to settle at $4.44.

Among major global markets, Australian stock market rallied today on account of US Labour Department releasing impressive jobs data. The US economy created 312k new jobs in December 2018, almost double as compared to the market expectation of 176k. Shares rebounded on positive assurance by Fed chief Mr. Powell in its rational and patient approach in future interest rates. Besides, People’s Bank of China announced lowered capital reserve requirements for local banks. Investors are also hoping for positive trade relations between global superpowers in the upcoming Beijing meeting.

Global markets remained volatile last week on account of Apple’s warning last week on lower revenue expectation of $84 billion for the quarter, a tenth lower than market expectation on account of reduced Chinese demand. Apple blamed sluggish Chinese economic growth and ongoing US-China trade war for the downgrade. Global indices have been demonstrating dismal performance on account of global macroeconomic disturbances, UK’s uncertain Brexit, the anticipated slowdown in the US economy with probable interest rate hike by Fed in the coming year.

Although the global market bounced back feeding on positive global news, how far the recovery sustains is yet to be seen, depending on the unfolding of market sentiments and several macroeconomic factors.


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