Australian share market closes in the black after historic week

THE Australian share market today ended in positive territory, rising 0.8 per cent after one of the most volatile weeks in its history.  The S&P/ASX 200 rallied 31.8 points, or 0.77 per cent, to 4172.6, while the All Ordinaries rose 34.4 points (0.82 per cent) to 4237.9. The increase came after another remarkable rally on Wall Street last night. The Dow Jones rose 423 points yesterday, but it remained 301 points in the red ahead of tonight's session, after a week of the most volatile trading sessions since the global financial crisis.

The ASX 200 was trading higher shortly after the open, but the benchmark index weakened across the afternoon. The Australian dollar remained under pressure, trading at $US1.03. Morgan Stanley Smith Barney Vice-president Fabiola Gibson said the volatility, which had created some positive trading sessions, had eroded investor sentiment towards equities. "Sentiment has just fallen off a cliff," Ms Gibson told The Australian Online. "The difficulty in a market like this is that no one has time to think. "In a market like this you need nerves of steel." Despite the recovery in Australia over the past three sessions, the ASX 200 remains down 12 per cent for the year.

In the US, the blue-chip Dow had fallen nearly 12 per cent for the month as of yesterday's close, while the S&P 500 had shed 13 per cent and the Nasdaq had lost nearly 14 per cent heading into the latest session. The futures market is pointing towards mixed sessions on major world markets tonight.

UBS Warburg Australia Equities executive director Rob Taubman said the Australian market reflected investors' confidence in the strength of the local economy. "It's feeling much more stable today," he said. "I think there's been a realisation by funds that the yield and valuations are in pretty attractive territory now." Mr Taubman said the gains were not expected to last as investors continued to keep a close watch on the direction of offshore markets.

Among Australian banks, National Australia Bank was off 6 cents at $22.96, Westpac was up 2c at $20.47, Commonwealth Bank slipped 2c at $48.56 and ANZ lost 17c to $19.92. Miners ended the day stronger. BHP Billiton was up 28c at $38.21, while Rio Tinto gained $1.11 at $71.52.