The Australian share market opened with a bang. This upsurge in the share market can be attributed to the fact that the price of crude oil climbed in the offshore session. When the official market opened at 10:15 am, the share market's benchmark S&P/ASX index climbed by 0.62 percent or 32.1 points and reached 5,219.8. At the same time, the all ordinaries index climbed by 0.61 percent or 32 points and reached 5,282.9.
However, the share markets were affected most by an increase in the price of Brent crude. In a single night, the price of Brent crude climbed by 2 percent and reached $47 per barrel.
Robert Barkley, Executive Vice President of Portfolio Management, at Orix Trading says, "A weaker dollar and an increase in oil prices have led to an upbeat commodity sentiment in general."
He added, "The Reserve Bank of Australia is set to have a meeting next week. The investors are hoping that during the meeting, the bank will induce an interest-rate cut. Similarly, since the Australian dollar has turned negative, the investors are also hoping that the Reserve Bank of Australia will decide to sell bank shares."
As the support for energy and mining stocks is climbing, the pressure on financial stocks is also increasing. This can lead to the emergence of a highly diverse market.
Before yesterday's heavy falls, all the big banks traded higher. The ANZ banking group was farthest ahead in the race -- it registered a 0.8 percent hike and reached $24.07. The Commonwealth Bank of Australia hiked by 0.19 percent and reached $73.90. The National Bank of Australia, on the other hand, hiked by 0.65 percent and reached $27.08 while Westpac hiked by 0.13 percent and reached $30.98.
The increase in oil prices also affected some major energy giants positively. The share prices of Santos jumped by 2 percent and reached $4.63. Likewise, Woodside also registered a hike of 2 percent and reached $28.26 and Origin bounding jumped by 2.3 percent and reached $5.42.
The oil prices also affected the mining sector positively. The prices of BHP hiked by 3.3 percent and reached $20.29. At the same time, the prices of Rio Tinto jumped by 2.2 percent and reached $49.49. Fortescue, which is the fourth largest producer of iron ore in the world, registered a tremendous rise of 3.9 percent. This was surprising as iron prices have registered a decline for four consecutive sessions.
Some companies did however register a downfall. For instance, Telstra rolled down by 0.37 percent and fell to $5.36. Likewise, Qantas rolled down by 2.7 percent and settled on $3.25.
Pacific Brands, the popular Australian products company, accepted an offer of $1.1 billion and will be taken over by US-based Hanesbrands. According to the deal, the price of every share of Pacific Brands is $1.15. This is 22 percent higher than the last stock price.
Currently, the Australian dollar measures 76 against the US dollar. As the chance of a weak inflation thickens, the investors are hoping that the bank will cut rates this year.
