Australian sharemarket soars, dollar surges against greenback .

ASX investors were inspired by a Wall Street surge and a strong jobs report. 

 THE Australian sharemarket made its strongest close in a month today and the dollar surged on the strength of a robust jobs report.
 
The jump in the sharemarket today was fuelled by short covering and profit-taking by investors, with financial stocks leading the way. Investors were also inspired by  Wall Street's 3 per cent surge.
The benchmark S&P/ASX 200 index was up 102.1 points, or 2.4 per cent, at 4356.7 points, while the broader All Ordinaries index gained 96.2 points (2.25 per cent) to 4374.
On the Sydney Futures Exchange, the September futures contract was 97 points higher at 4344 points, on 35,048 contracts.
Dow Jones Newswires reported that the Australian dollar also rose strongly on the back of the robust report on the country's labour market today, pushing the currency to its highest levels this month against the US dollar.
In addition, the currency is notably near the high point of its recent range. At 0620 GMT, the Australian dollar was quoted at US87.25 cents, up from US84.83c late yesterday. Since the middle of May, the cross has stayed mostly between US81c and US88c, finding heavy pressure on both ends of that range.
Against the Japanese yen, the Australian dollar was recently at Y77.105 from Y74.20.
CMC Markets' senior dealer Matt Lewis said positive sentiment from a strong US lead combined with short-covering and profit-taking to boost the market.
“We also got a bit of a kick along from the strong jobs data,” he said.
The latest employment data beat market expectations soundly, with total employment rising by 45,900 to 11.101 million in June, seasonally adjusted, compared to expectations of an increase of 15,000.
Australia's unemployment rate in June was a seasonally adjusted 5.1 per cent, instead of 5.2 per cent expected by economists.
Mr Lewis said the sharemarket has risen 4 per cent this week, but thin volumes showed institutions and foreign investors were still absent.
“The rally feels overdone,” he said.
“The real money is not going to head in until we see some clarity from reporting season in the US.”
US-listed companies will start reporting June-quarter earnings next Monday, with Australian-listed corporates reporting interim and full-year results from July 26.
The market expects US companies to deliver a 34 per cent lift in earnings and positive outlook statements, Mr Lewis says.
“If we don't get super-positive commentary, then I think we'll resume the sell-off.”
Banks and financial stocks led the Australian market, with Macquarie Group surging $2.27 (6.25 per cent) to $38.58 and ANZ jumping 91c (4.29 per cent) to $22.14. Westpac advanced 77c (3.62 per cent) to $22.02, National Australia Bank gained 67c (2.9 per cent) to $23.76 and Commonwealth Bank added $1.30 (2.69 per cent) to $49.55.
“The speculation has been that offshore funds have been shorting Aussie financials en masse just on concern over their exposure to the housing market,” Mr Lewis said.
Resources and energy stocks made solid gains, with BHP Billiton advancing 73c (1.95 per cent) to $38.16 and Rio Tinto adding $1.21 (1.84 per cent) to $67.05.
Oil Search gained 10c (1.8 per cent) to $5.66, Woodside Petroleum put on 79c (1.91 per cent) to $42.09 and Santos jumped 31c (2.49 per cent) to $12.76.
The spot price of gold in Sydney was trading at $US1206.50 per fine ounce, up $US17.25 from yesterday's close.
Retailers enjoyed broad-based strength, with Harvey Norman the standout performer, up 20c (5.8 per cent) at $3.65.