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Investors in Australian shares pushed the market back to levels last seen at the middle of January on Wednesday, amid ongoing optimism for economic growth at home and overseas.
"We're still in the sweet spot for investors - a further rise in global growth to around 3.9 per cent, driving solid earnings growth with continuing low inflation and easy global monetary conditions should keep investment returns favourable," said Shane Oliver, AMP Capital's head of investment.
The S&P/ASX 200 index rose 17 points, or 0.3 per cent, to 6054, while the All Ordinaries climbed 18 points, or 0.3 per cent, to 6168. The Australian dollar reached US80.13??.
Westpac lifted its Australian dollar forecast for the end of 2018 on Wednesday to US72??, from a previous forecast of US70??, after revising its expectations for US interest rate hikes as the US economy continues to strengthen.
The Australian economy, meanwhile, has given out some surprisingly strong signals recently and this continued on Wednesday, with the Westpac-Melbourne Institute Leading Index showing a stronger reading for December.
Amid the optimism, financials were stronger for the second day in a row, with Macquarie up 1.6 per cent at $104.40 and Westpac up 0.4 per cent at $31.01.
Insurance firm QBE was a standout in the sector, rising 5.4 per cent to $10.99 as analysts considered potential paths for the company after new CEO Pat Regan on Tuesday foreshadowed a $1.2 billion full-year loss for the firm.
"We suspect the new CEO is likely to be relatively ruthless as top what businesses he is prepared to dispose of, albeit it seems that, for now, the remainder of Asia is on the keep list," Citi analysts said.
Santos shares gained 1.2 per cent to $5.24 after the oil and gas producer posted increases in quarterly and full-year sales as it continues to deliver on its turnaround strategy and benefits from climbing commodity prices.
Oil closed at its highest since December 2014 on Tuesday as signs mount that dwindling US stockpiles are contributing to a tightening global market.
But iron ore took a tumble on Tuesday. In recent days, Barclays and ING Bank have both warned that iron ore's set to drop when profitability levels at Chinese steel mills recede.
Miners trading lower included BHP., down 0.4 per cent at $30.68, and Rio TInto, also down 0.4 per cent, at $78.20.
Market movers
SomnoMed
Shares in sleep-related breathing disorders solutions firm SomnoMed dropped 13.8 per cent to $3.37. The firm reported second-quarter revenue growth of 45 per cent to $18.5 million, with direct sales to customers seeing good growth but sales to licencees falling sharply compared to a year ago. Core businesses generated a first-half EBITDA of $1 million, while the firm's RSS unit saw start-up losses of $4 million. Together those results saw the firm produce an overall EBITDA loss for the half-year of $3.4 million, it said.
Survey surprise
The Westpac-Melbourne Institute Leading Index showed a six month annualised growth rate reading of +1.41 per cent in December, up from +0.66 per cent in November. The index indicates the likely pace of economic activity relative to trend three to nine months into the future. "This is a very strong above trend reading and, following the solid results in October and November, points to solid above trend growth in the early part of 2018," said Westpac chief economist BIll Evans.
Oil on fire
Oil closed at its highest since December 2014 as signs mount that dwindling US stockpiles are contributing to a tightening global market. Futures in New York jumped 1.4 per cent on Tuesday. Crude inventories held in US terminals and tanks last week probably fell for a 10th week. That would be the longest stretch of declines in at least three decades, if government data on Wednesday confirms it. Underpinning the price rally were also assurances from Russian and Saudi Arabian oil chiefs that a historic production accord by the world's largest producers will endure. WTI futures traded at $64.46 a barrel on Wednesday and Brent futures were at $69.82.
The "petro"
Venezuela's "petro" cryptocurrency will initially be offered in a pre-sale in hard currency and other cryptocurrencies, the government said, and not initially available in the country's collapsing bolivar currency. Leftist President Nicolas Maduro is hoping to capitalise on the success of cryptocurrencies by creating one for Venezuela as the bolivar plunges to all-time lows and the country struggles with hyperinflation.In his surprise announcement late last year, he said the petro would be backed by Venezuelan crude reserves, the world's largest, although the political opposition says this would be illegal.
Shiny Sterling
Sterling was trading at $1.4026 against the dollar after powering past $1.40 to reach its highest level since the vote to leave the European Union in June 2016 on Tuesday. Sterling is extending a rally fuelled by growing optimism around Britain's chances of securing a favourable Brexit deal. The currency has climbed 4 per cent since the start of the year against the dollar, putting it on track for its strongest month in more than four years against a dollar that has weakened across the board.