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S&P/ASX 200 update: ASX soars on Fed rate hike

Credit : Will

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) soared as much as 1.8% shortly after the opening bell this morning and, although it has retreated since then, it is still sitting roughly 1.6% higher approaching 1pm (Sydney time).

The share market’s massive jump came after the U.S. Federal Reserve elected to hike interest rates for the first time in nine years overnight. The decision was widely expected and reflects the U.S. central bank’s confidence that the U.S. economy, and the global economy, are ready to withstand higher interest rates in the world’s biggest finance market.

Although BHP Billiton Limited (ASX: BHP) was unfortunately unable to extend on yesterday’s impressive rally, falling 1.1% today, most other blue chip shares are performing strongly.

Among the banks, for instance, Australia and New Zealand Banking Group (ASX: ANZ), National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) have all risen more than 2% while Commonwealth Bank of Australia’s (ASX: CBA) share price rose 1.9%.

Telstra Corporation Ltd (ASX: TLS) was another strong performer. Its shares rose 2.3% to $5.45, while Woolworths Limited (ASX: WOW) shares gained 1.3%.

The biggest winners for the day so far, however, are Senex Energy Ltd (ASX: SXY), WHITEHAVEN COAL LIMITED (ASX: WHC) and Caltex Australia Limited (ASX: CTX). The trio’s share prices have risen 9.6%, 9.3% and 6.5%, respectively.

The ASX hit a fresh two-and-a-half-year low on Tuesday this week at just 4909 points, but has since managed to soar back to 5110 points. Although it’s still a long way from its peak near 6000, the fantastic gains over the last two sessions should certainly be encouraging for investors ahead of the 2016 calendar year.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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