After month on the march, market catches its breath

The Australian sharemarket has closed slightly lower for the week, the first fall after four weeks of rises, as Westpac went ex-dividend and Commonwealth Bank shares hit an all-time high.

The benchmark S&P/ASX200 index fell 10.5 points, or 0.2 per cent, to close the week at 5400.7 points. The broader All Ordinaries Index closed the week down 12.2 points, or 0.22 per cent, to 5394.4 points.

"The party continues for the banks," Leyland Private Asset Management senior portfolio manager Rohan Schmidt said. "That's probably one of the biggest stories for the week. If you take out the banks, it's been a fairly flat week. We've had the interruption of the Melbourne Cup, which kept volumes a bit on the low side."

Iron ore miners fared well for the week, with Mount Gibson the best- performing member on the S&P/ASX200 with gains of 12.64 per cent.

Atlas Iron was a close second, closing 12.32 per cent higher. Fortescue Metals, Sundance Resources, Kingsgate Consolidated and Lynas Corporation were also among the top 10 performers.

Official figures released during the week showed that iron ore exports had risen to a record high of $8.1 billion in September as the trade deficit narrowed to $284 million.

Meanwhile, iron ore prices have remained stronger for longer despite forecasts of lower demand as the market enters a slow period.

The Reserve Bank kept the door open for further interest rate cuts even as it left the cash rate on hold at 2.5 per cent at its November board meeting on Tuesday.

"This week, with the banks going ex-dividend, you've got CBA hitting record highs," RBS Morgans senior trader Luke McElwaine said. "A few companies that haven't performed are starting to perform. BHP's had a great week. It seems to have broken that $36-to-$37 level and is trading higher than that.

"So all of these top 20-type stocks are all hitting 12-month highs and I think that's a great sign for the market. Our market appears to have broken a trading range between 4000 and 5200, and we seem to be holding those levels around 5400."

Even so, a fall in most base metal prices dented diversified resources group BHP Billiton and its rival Rio Tinto on Friday, Lonsec senior client adviser Michael Heffernan said.

"The big resources stocks were down a bit [on Friday] probably due to the waxing and waning of commodity prices not shooting the lights out [on Thursday]," he said.

BHP lost 29¢ to $37.95 on Friday, Rio dropped 23¢ to $65.25 and iron ore miner Fortescue Metals shed 24¢ to $5.46. Goldminer Newcrest fell 25¢ to $9.88.

In banking, Westpac dropped $1.05 to $33.18 after paying out a 98¢ dividend.

Of the other banks, ANZ rose 33¢ to $32.71 on Friday, National Australia Bank added 10¢ to $34.78, and the Commonwealth Bank came back from its record high, losing 22¢ to $79.10.

Qantas added 2.5¢ to $1.25 after it confirmed it would close its Avalon heavy maintenance base in Victoria at the end of March.

Casinos operator Echo Entertainment dropped 10¢ on Friday, or 3.92 per cent, to end the week at $2.45 after it said it could spend up to $1.5 billion on redeveloping its Queensland casinos.

Telecommunications EGPheavyweight Telstra rose 3¢ on Friday to close at $5.18.

The market is set to turn its attention to October non-farm payrolls figures and unemployment data in the US, which were to be released early on Saturday.

Across the region, all eyes were looking to China's Communist Party policy-setting meeting, called the Third Plenum, scheduled for November 9 to 12.

China watchers said the meeting could be used as a platform to launch a series of far-reaching economic reforms.