Australia’s share market had its best day in more than two months as investors lapped up supportive central bank decisions and became less concerned by the Omicron variant.
The market closed about one per cent higher after the Reserve Bank left its record-low rate and bond-buying unchanged in its final meeting of the year.
The bank said the latest coronavirus strain was not expected to derail economic recovery and left out a previous estimate of rates not rising until late 2023.
Foreign exchange traders spotted the omission. They bid up the value of the Aussie dollar in expectation of an earlier rate hike. The dollar stayed within the 70 US cents bracket.
On the market, the benchmark S&P/ASX200 index closed up 68.8 points, or 0.95 per cent, to 7313.9 points.
The All Ordinaries closed higher by 76.2 points, or 1.01 per cent, to 7605.2 points.
Momentum may also have been helped by the People Bank’s of China lowering the amount of cash banks needed to keep in reserve. The move is designed to stimulate the economy.
Earlier, US markets rallied after infectious diseases expert Dr Anthony Fauci said Omicron did not look to have a great deal of severity.
On the ASX, the best performing shares were energy and healthcare.
Energy shares improved by about two per cent after the oil price rose by about one per cent.
Easing concerns about Omicron have led to a more positive outlook for travel demand.
Beach rose by a little more than four per cent. Oil Search climbed three and a half per cent.
Travel stocks had plenty of attention. Corporate Travel Management and Flight Centre each rose by a little more than five per cent. Webjet gained 4.5 per cent.
Elsewhere, the boss of fund manager Magellan Financial is leaving for personal reasons.
Brett Cairns has been chief executive since 2019 but has been at the company since 2007.
Chief financial officer Kirsten Morton is the interim chief executive.
Shares were down 6.37 per cent to $29.10.
Bank of Queensland shares rose after a trading update at its annual general meeting.
The bank said its full-year net interest margin would be slightly lower than forecast due to tougher competition including increased fixed rate lending.
However, full-year expenses were expected to be lower by one per cent. The merger with ME Bank remains on track.
Shares were up 4.21 per cent to $7.92.
The best of the big four banks was ANZ. Its shares rose 1.55 per cent to $27.46.
The big miners were down early but improved later. Fortescue was best and gained 1.5 per cent to $17.41.
Miner IGO confirmed it was assessing buying a greater stake in nickel miner Western Areas.
Western Areas’ main asset is the Forrestania Nickel Project in Western Australia.
IGO shares were down 1.19 per cent to $9.93.
Western Areas shares were up 3.7 per cent to $3.08.
Buy now, pay later provider Zip claimed a record amount of sales were made using its service in November.
The total sales were up 52 per cent on the same month last year. There were a record number of transactions for the month.
Shares were up almost 10 per cent to $4.77.
The Australian dollar was buying 70.82 US cents at 1721 AEDT, higher from 70.19 US cents at Monday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed up 68.8 points, or 0.95 per cent, to 7313.9 points on Tuesday.
* The All Ordinaries closed higher by 76.2 points, or 1.01 per cent, to 7605.2 points.
* At 1721 AEDT, the SPI200 futures index was down three points, or 0.04 per cent, at 7328 points.
One Australian dollar buys:
* 70.82 US cents, from 70.19 cents on Monday
* 80.54 Japanese yen, from 79.31 yen
* 62.73 Euro cents, from 62.18 cents
* 53.31 British pence, from 53.03 pence
* 104.60 NZ cents, from 103.91 cents.