THE sharemarket began the 2013 trading year on a bright note, climbing more than 1 per cent to an 18-month high as investors welcomed a deal that averted the fiscal cliff in the US.
The benchmark S&P/ASX 200 Index was up 57 points, or 1.23 per cent, at 4705.9 on Wednesday, while the broader All Ordinaries rose 58.3 points, or 1.25 per cent, to 4722.9.
The market, which was closed on Tuesday for New Year's Day, opened up 0.3 per cent and extended gains as investors took their cue from good news out of Washington regarding the US fiscal cliff.
The US Congress and the White House agreed on measures to avoid steep tax rises and spending cuts - dubbed the fiscal cliff - coming into effect at the start of 2013.
While the result was not a comprehensive solution, the US economy could have slid back into recession in the absence of a deal.
"Asian markets have sprung to life on the first trading day of 2013, with big gains across the risk space," IG Markets strategist Stan Shamu said in a research note.
Locally, the gold sector was the best performer, rising 3.17 per cent. Metals and minerals (up 2.51 per cent) and materials (up 2.29 per cent) also had a positive day.
BHP gained 74? to $37.84, while Rio Tinto was $1.61 firmer at $67.62.
Financial stocks were 0.8 per cent higher, with the four big retail banks all posting modest gains. ANZ climbed 4? to $25.09, CBA advanced 54? to $62.72, NAB rose 10? to $25.10 and Westpac was 6? higher at $26.10.
Gindalbie Metals said it had shipped its first cargo of magnetite from the Karara iron ore project in Western Australia after extensive delays. In percentage terms, Gindalbie was the second-best performing stock in the top 200, climbing 10 per cent to 27.5?.
The spot price of gold in Sydney was $US1680 an ounce, up $US16.66.
Meanwhile, bond futures prices fell sharply after the fiscal cliff deal.
The March 10-year bond futures contract was trading at 96.615 (implying a yield of 3.385 per cent), down from 96.745 (3.255 per cent) on Monday. The three-year contract was at 97.200 (2.800 per cent), down from 97.320 (2.680 per cent).
JPMorgan interest rate strategist Sally Auld said futures prices opened lower and continued to fall in the lead up to the vote.
Frequently Asked Questions about this Article…
How did the ASX react to the US fiscal cliff deal at the start of 2013?
Investors welcomed the US fiscal cliff deal and the S&P/ASX 200 jumped about 57 points (roughly 1.23%) to 4,705.9, while the All Ordinaries rose about 58.3 points (1.25%) to 4,722.9 as markets opened the year on a strong note.
Which ASX sectors led gains after the fiscal cliff retreat?
The gold sector led gains, up about 3.17%, with metals & minerals rising around 2.51% and broader materials up about 2.29% — showing commodity-linked sectors outperformed on the positive risk tone.
How did major miners like BHP and Rio Tinto perform during the rally?
Major miners shared in the lift: BHP rose to $37.84 and Rio Tinto gained $1.61 to trade at $67.62, benefiting from the stronger sentiment in resources stocks.
What happened to the big four Australian banks during the market rally?
Financial stocks were higher overall (about 0.8%), with the big four banks posting modest gains — ANZ traded at $25.09, CBA at $62.72, NAB at $25.10 and Westpac at $26.10 on the day.
Why did Gindalbie Metals shares jump, and how large was the move?
Gindalbie Metals climbed after announcing it had shipped its first magnetite cargo from the Karara iron ore project in Western Australia following extensive delays — the stock rose about 10% to 27.5.
What happened to the gold price in Sydney during the market move?
Gold was stronger: the spot price in Sydney was about US$1,680 an ounce, up roughly US$16.66 on the day, making the gold sector the best performer locally.
How did bond futures and yields respond to the fiscal cliff agreement?
Bond futures prices fell sharply after the deal, which corresponded with higher implied yields — for example, the March 10‑year bond futures traded at 96.615 (implying a roughly 3.385% yield), down from the prior session’s price, and three‑year futures were also lower.
What did market strategists say about the regional market reaction?
IG Markets strategist Stan Shamu noted Asian markets 'sprung to life' on the first trading day of 2013, with big gains across the risk space as investors took their cue from the positive news out of Washington.
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