Australian stock market jumps despite confirmation of economic recession

Australian stock market jumps despite confirmation of economic recession

Confirmation the Australian economy has plunged into recession hasn’t fazed the share market, which broke a three-day losing streak.

The benchmark S&P/ASX200 index plunged 1.77 per cent below the key 6000-point mark on Tuesday — the worst close in about five weeks.

But it rebounded on Wednesday, finishing 1.84 per cent higher at 6063.2 while the All Ordinaries Index rose 1.77 per cent to 6251.8.

That came despite the latest gross domestic product figures showing the Australian economy contracted by 7 per cent in the June quarter, placing it officially in recession. Over the year, the economy fell 6.3 per cent – the biggest annual decline since 1945.

Share price gains were broadly across the board, excluding buy-now-pay-later companies, after US payments giant PayPal announced it would enter the space in coming months.

Australian market leader Afterpay fell 2.78 per cent to $81.75, Zip Co plummeted 12.14 per cent to $7.02, Sezzle lost 4.45 per cent to $8.37 and Openpay dropped 9.73 per cent to $3.62.

Money manager IOOF Holdings came out of a trading halt after announcing it had raised about $730 million from the first tranche of a discounted capital raising, launched on Monday, to help pay for its acquisition of National Australia Bank’s MLC Wealth business.

Shares in IOOF finished 22.03 per cent lower at $3.61.

NAB put on 1.03 per cent to $17.58, ANZ lifted 1.29 per cent to $18, Commonwealth Bank rose 1.15 per cent to $67.56 and Westpac added 1.23 per cent to $17.26.

Mining giant BHP gained 2.93 per cent to $38.60, Rio Tinto appreciated 1.59 per cent to $99.03 and Fortescue was up 1.99 per cent at $17.97.

Bathrooms and kitchens fittings and fixtures company GWA Group was among the best performers, rising 8.16 per cent to $2.65.

AMP, which completed the $3 billion sale of its life insurance business in July, announced it was considering more divestments after a recent increase in unsolicited approaches from prospective buyers.

Shares in the company closed 4.87 per cent higher at $1.62.

The Aussie dollar was fetching 73.65 US cents, 55.03 British pence and 61.84 Euro cents in afternoon trade.