Optimism about US rates perks up market

The sharemarket has posted its first weekly gain in a month as positive sentiment about interest rates in the US sparked some life into local stocks.
The S&P/ASX 200 benchmark rose 16.1 points to 4644 on Friday, up 63.9 points over the week, while the All Ordinaries also jumped 15.5 points to 4590.9 on the day, up 56.1 points over the week.
Despite the US Federal Reserve's lifting interest rates for the 13th consecutive time by 0.25 basis points, this time to 4.25 per cent, investors interpreted a brief statement from the central bank this week as a sign it had completed its task of shifting rates to a more neutral level.
Nomura Australia market strategist Eric Betts said the optimism in the US about the likely direction of interest rates had rubbed off on the local bourse this week.
Shaw Stockbroking head dealer Jamie Spiteri said the banks and insurers helped to lift the market into positive territory despite a dearth of "significant eye-catching news".
"What we have seen this week are some indifferent days back-to-back, but generally the market has continued its upward trend," he said.
Insurance Australia Group was a noticeable improvement, rising 9c to $5.30 on Friday and 48c over the week, as investors took advantage of a stock that presented a good buying opportunity under $5.
Among the banks, Macquarie took centre stage when the London Stock Exchange dismissed a hostile $3.5 billion takeover bid by a Macquarie-led consortium. The stock fell 60c to $67.30 on Friday and was down 90c over the week.
But St George was the star performer on Friday when it announced at its annual meeting plans to buy back up to $300 million of its own shares. The country's fifth-largest bank rose 75c to $29.15 on Friday and $1.20 over the week.
Resource stocks suffered from a fall in the gold price from 24-year highs and profit-taking. Newcrest was one of the biggest losers, falling 85c over the week but rising 4c to $21.24 on Friday.
Despite a general slowdown in trading as the festive season looms, Mr Betts said a rally before Christmas was still on the cards if oil prices eased or retail sales were better than expected.
"There is always a chance [of a Santa Claus rally]," he said. "We are pretty high already but Santa could still arrive before Christmas." The Santa Claus effect refers to the historically good run on the stockmarket in the lead-up to Christmas.
AMP Capital Investors's head of investment strategy, Shane Oliver, said local stocks could record gains in the new year because of "reasonable" profit growth and better yields compared to other investments.