The Australian market is surging higher on a Santa rally for the second day in a row following strong gains on Wall Street overnight.
Investors went on a buying frenzy, pushing up the S&P 200 index by 2.3%, the best one day rally for 2014.
The major banks are on a tear, led by Westpac which was up 2.6% at $32.42 and the ANZ 1.89% to $31.56.
The big miners are heading even higher. BHP was up 2.78% to $28.82 and Rio Tinto 2.17% to $55.92. Pure play iron ore producer Fortescue was up 2.6% to $2.56.
Stan Shamu, IG’s Market Strategist, says materials and energy names got off to a very good start but the price action waned.
“Presumably the fact commodities remain choppy has something to do with this,” Shamu says.
“As a result, some investors will be looking to take advantage of the recovery, using this as an opportunity to close positions. Bargain hunters who had waited for a catalyst before buying stocks on their wish lists will be using this as an opportunity to accumulate.
“The financials have been rock solid today and have really underpinned the rally. Over the next two weeks volume will be light, activity will be limited and any moves could easily be exaggerated.”