ASX jumps 1% as RBA cuts rates

These three large cap stocks beat the market

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published October 2, 2012 5:17 pm AEST

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has posted a 1% jump today, closing at 4,433.0, on the back of positive US manufacturing news overnight, and the Reserve Bank of Australia's (RBA) 0.25% cut to official interest rates this afternoon.

The Australian dollar has fallen below US 103 cents, on the back of the RBA's rate cut. Most economists are still expecting further cuts, with AMP's Shane Oliver looking for a further 0.25% cut in November and then another one in February or March in 2013, to take the official cash rate to 2.75%.

All sectors of the market performed well today, these three major stocks saw rises by 2.5% or more.

Stockland (ASX: SGP) shares rose 3.3% to close at $3.42. The property developer specialising in residential and retirement living is currently trading below its net tangible asset value of $3.68, and may have benefitted from today's rate cut and news that Australian house prices have posted their biggest rise in two years.

Goodman Group (ASX: GMG) saw its shares rise 2.5%. Another real estate manager and developer, Goodman announced today that its industrial property fund was launching a $400m equity raising, following several initiatives to secure its longer-term investment outlook, including several property transactions that appear to have been undertaken at the low point in the cycle, giving the group room to increase their value.

Qantas Airways Limited's (ASX: QAN) share price also climbed 2.5% to end at $1.22, on news that the company had simplified its freight business, by selling its 50% stake in StarTrack to Australia Post and acquire 100% of the Australian air Express. The transaction will net Qantas $408 million and result in a profit of around $30 million. The shares rose despite news that the court has ruled that Qantas has to pay the Australian Tax Office the $34 million in GST it collected from passengers, but who then didn't turn up for their flights.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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