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Share market edges higher after weak start

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Published on: Tuesday, September 05, 2017

The Australian share market has overcome a poor start to close slightly higher, helped by a late rally in bank stocks and support for the miners on the back of recent improvements in commodity prices.

Economic data was also supportive, but investor sentiment was tempered by the potential for a strengthening economy to boost the case for a lift in interest rates.

The benchmark S&P/ASX200 stock index added 4.2 points, or 0.07 per cent, to 5,706.2 points.

CMC Markets chief market strategist Michael McCarthy described trading on Tuesday as “a draw”.

“We’ve seen fairly modest reactions around the world to North Korea’s intransigence and the White House’s bellicosity,” Mr McCarthy said.

“And given we’ve seen a strong rally in industrial commodities over the last week or so, there’s good reason for support for the Australian market.”

He said the mining sector was stronger from early trading, and the big banks had been weighing the market down.

“That’s really what’s turned the situation around – they (the banks) have rallied back,” Mr McCarthy said.

Commonwealth Bank gained 18 cents to $74.59, National Australia Bank added nine cents to $30.35, Westpac rose six cents to $31.29, and ANZ dropped five cents to $29.35.

BHP Billiton added 0.5 per cent to $27.62, Rio Tinto rose 0.65 per cent to $68.12 and Fortescue Metals was 0.85 per cent stronger at $5.93.

Gold miners were also stronger after gold prices surged to their highest levels in nearly a year as investors flocked to safe-haven assets amid worries that North Korea might launch more missiles.

Newcrest Mining ascended 0.7 per cent to $23.48.

The Australian dollar was boosted by strong government spending and net exports in the June quarter, which prompted economists to upgrade their economic growth forecasts.

The local currency jumped to 79.83 US cents soon after the release of the data, before easing ahead of the Reserve Bank’s decision to keep the cash rate on hold at 1.5 per cent, and then rising again late in local trade.

ON THE ASX:

* The benchmark S&P/ASX200 added 4.2 points, or 0.07 per cent, to 5,706.2 points.

* The broader All Ordinaries index gained 4 points, or 0.07 per cent, to 5,767.8 points.

* The September SPI200 futures contract was up 12 points, or 0.21 per cent, at 5,692 points.

* National turnover was 2.6 billion securities traded worth $4.6 billion.

CURRENCY SNAPSHOT AT 1700 AEST:

One Australian dollar buys:

* 79.75 US cents, from 79.53 US cents on Monday

* 87.17 Japanese yen, from 87.08 yen

* 67.00 euro cents, from 66.85 euro cents

* 61.68 British pence, from 61.39 pence

* 111.18 NZ cents, from 111.03 NZ cents

GOLD:

The spot price of gold in Sydney at 1700 AEST was $US1,335.46 per fine ounce, down from $US1,337.55 per fine ounce on Monday.

BOND SNAPSHOT AT 1630 AEST:

* CGS 4.50 per cent April 2020, 1.9371pct, from 1.891pct on Monday

* CGS 4.75pct April 2027, 2.6231pct, from 2.573pct

Sydney Futures Exchange prices:

* September 2017 10-year bond futures contract at 97.33 (implying a yield of 2.67pct), from 97.38 (2.62pct) on Monday

* September 2017 3-year bond futures contract at 97.98 (2.02pct), from 98.03 (1.97pct).

(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)


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