Big bank gains help arrest the slide
THE sharemarket recovered from seven-week lows to close modestly higher on Wednesday. But investors remain anxious about developments in Europe and the US.
THE sharemarket recovered from seven-week lows to close modestly higher on Wednesday. But investors remain anxious about developments in Europe and the US.The S&P/ASX 200 Index rose 8.6 points, or 0.2 per cent, to 4388.4, while the broader All Ordinaries gained 6.5 points to 4410.7.Financials gained 0.6 per cent and telecoms added 0.4 per cent, while goldminers fell 1.2 per cent, energy dropped 0.6 per cent and materials shed 0.3 per cent.Better-than-expected earnings results in the US coupled with receding fears that Greece is close to defaulting on its debt helped maintain a cautious optimism, as investors look for the market to break out of its downward trend.Banks did most of the heavy lifting with the big four all posting gains. Commonwealth Bank added 0.7 per cent to $59.09, ANZ jumped 0.6 per cent to $24.20, NAB rose 0.6 per cent to $23.24 and Westpac pushed up 0.2 per cent to $24.85.Among the miners, Rio Tinto was up 0.3 per cent to $57.85, while rival BHP fell 0.1 per cent to $33.73. Iron ore miner Fortescue jumped 0.8 per cent to $4.Consumer confidence surged to a 19-month high, with households reacting positively to the Reserve Bank's recent rate cuts, according to a Westpac and Melbourne Institute survey.As a result, retail stocks enjoyed a small boost, with department store David Jones adding 0.8 per cent to $2.46 while rival Myer gained 0.3 per cent to $2. Harvey Norman was flat at $1.81 and JB Hi-Fi jumped 0.8 per cent to $10.18."Everyone is quietly hoping this is going to be the good news that takes us into Christmas. However, I wouldn't put my money on it," said Janine Cox, a Wealth Within analyst.Webjet shares were hammered after it warned of "very low growth levels" in the travel sector in recent months, despite issuing guidance of at least 10 per cent increase in profit after tax for this financial year. Shares in the online travel retailer fell 15 per cent to $3.51."Stocks like [Webjet] really get slammed in a market like this. They've been so good, the stock has been really solid and they've been trending up nicely. Their strategy has been an open one [but] in this climate, the market can be quite brutal," Ms Cox said.Media shares performed well, with Fairfax Media up 4 per cent to 39.5? after its sold its portfolio of US rural magazines.Seven West Media jumped 2.3 per cent to $1.32, Ten Network rose 1.8 per cent to 28?, APN added 1.6 per cent to 32? and News Corp nudged up 0.3 per cent to $23.60.The Australian dollar was up half a cent on improved consumer sentiment and weakness in the greenback. Late on Wednesday, the dollar was trading at US104.52?.