Australia shares edge higher in choppy trade, banks buoy

August 26, 2014

* ASX 200 reverses early loss to add 0.1 pct, banks, insurers lift

* 87 shares higher, 101 shares lower, 12 shares unchanged (Adds analysis, quotes, stocks on the move)

By Thuy Ong and Naomi Tajitsu

SYDNEY/WELLINGTON, Aug 26 (Reuters) – Australian shares added 0.1 percent onTuesday, as banks and insurers helped lift the market to follow Wall Streethigher overnight, but resource stocks underperformed as spot iron ore pricesremained locked near the year’s lows.

The S&P 500 was unable to hold the 2,000 mark after moving above themilestone level for the first time on Monday, but still managed to close at arecord high.

Banks supported the market, with Commonwealth Bank of Australia (Other OTC: CBAUFnews) added 0.5 percent, Westpac Banking Corp gained 0.3 percent, andNational Australia Bank rose 0.4 percent.

The S&P/ASX 200 index added 8 points to 5,642.9 by 0147 GMT. Thebenchmark lost 0.2 percent on Monday, snapping seven consecutive sessions ofgains, its longest streak since mid-July.

Benchmark spot iron ore is trading close to this year’s low of $89 a tonne.Global miner Rio Tinto Ltd (Xetra: 855018news) dipped 0.4 percent, while Australia’s no.3iron ore miner Fortescue Metals Group lost 0.7 percent.

The benchmark index hit a 5-1/2 week trough of 5,425.2 on August 8 but hassince jumped some 200 points to hover at six-year highs, underpinned by a robustearnings season.

“The local market may experience near-term downside toward 5,600,” TimRadford, global investment manager at Rivkin Securities said in a note.

“A strong finish to the local earnings season is likely what this marketneeds to find firmer upside direction.”

Cover-More Group Ltd jumped 4 percent to near 2-1/2 month highs ofA$2.06 after beating its prospectus forecasts. Among otherinsurance companies, Suncorp Group added 0.9 percent, while InsuranceAustralia Group gained 0.6 percent.

Boart Longyear Ltd dropped 10.3 percent to 3-1/2 week lows ofA$0.17 after the drilling services firm posted a net loss in the six months toJune.

Among retail earnings, Pacific Brands Ltd climbed 1.3 percent afterAustralia’s largest-listed clothing manufacturer swung to a net loss in the yearto June, largely hit by one-off items even as sales revenue ticked up.

Specialty Fashion Group recovered slightly to fall 8.9 percentafter touching 4-1/2 month lows. The company said its full year profit after taxfell 3.8 percent to A$12.5 million.

New Zealand’s benchmark NZ-50 index inched up 17.73 points to5,200.47, hovering near an a three-month intraday high hit on Monday.

Gains were led by a 8.7 percent rise in Tourism Holdings whichrallied to a near six-year high of NZ$1.39 ($1.16) after the tourism companyreported a near 200 percent jump in full-year profits.

Xero climbed 2.0 percent to a near one-month high of NZ$25.50,extending its recovery from a 10-month low around NZ$20.15 hit earlier thismonth.

Investors returned to the accounting software developer after share pricesfor newer tech firms, including Serko and Gentrack, havestruggled following their listings in past months.

Further gains were curbed by a 2 percent fall in Cavalier Corporation, which extended losses to a 16 1/2-year low of NZ$0.92 after the softflooring manufacturer late last week announced an effective fall in profits dueto stiff competition in Australia and a strong domestic dollar.

New Zealand Oil and Gas fell 1.3 percent after it announced a fallin full-year profits, while Auckland Airport slipped 0.5 percent to asix-month low of NZ$3.68 after the company’s full-year profits came in line withanalysts’ expectations. (Editing by Eric Meijer)

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  • Commonwealth Bank of Australia

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