Banks help market curb mining losses
THE sharemarket closed modestly higher after strong leads from US banks helped local financials curb losses from the mining sector.
THE sharemarket closed modestly higher after strong leads from US banks helped local financials curb losses from the mining sector.The benchmark S&P/ASX 200 gained 8.1 points, or 0.2 per cent, to 4491.5.Financials continued to add to yesterday's climb, rising 0.5 per cent. Materials stocks were the biggest losers, down 0.5 per cent, gold fell 0.3 per cent and energy dropped 0.2 per cent."We had positive leads from the US, with some of the US banks reporting, those numbers looked reasonably good, particularly from the North America retail banking revenue. That gave our market, particularly the financials, a boost," said Sean Larcombe, head of risk and execution at Citigroup.All the big banks finished higher, ANZ added 0.2 per cent to $25.79, CBA rose 0.5 per cent to $57.09, NAB jumped 1.3 per cent to $26.62 and Westpac gained 0.4 per cent to $25.72.Rio Tinto and BHP were the main drags on the market, said Mr Larcombe, as commodity prices continued to weaken. Rio Tinto fell 1.1 per cent to $55.12, while BHP dropped 0.8 per cent to $33.07.Fortescue Metals jumped 3.6 per cent after the iron ore miner said it remained committed to expanding its production to 155 million tonnes a year.Ten Network continued its downward spiral, falling another 4.3 per cent to 33.5?.JPMorgan put out a cautious statement on Ten, saying: "Based on recent main channel weakness and the overall networks ratings decline, we see downside risk to Ten's 2013 financial year consensus earnings before interest, tax, depreciation and amortisation (EBITDA)".In a report on the wider media sector, Citi said that there were no signs of growth into November-December.Seven West Media and APN News Media were also down, 1.2 per cent and 2.6 per cent respectively, while Fairfax Media and News Ltd posted gains, up 2.6 per cent and 0.5 per cent, respectively.Retailers impressed, buoyed by the increased likelihood of a November interest rate cut, with Credit Suisse interest rates futures pricing in a 78 per cent chance of a 25-basis-point cut next month."It appears to us that dwelling investment will be an important factor that the RBA will be watching over coming quarters to 'fill the void' of softer mining investment," Deutsche Bank Australia chief economist Adam Boyton said."Given the heightened conservatism among Australian households, the net of this leaves our own view on rates unchanged: a 3 per cent cash rate by the end of this year, and 2.5 per cent around mid-2013."