Index dips as banks and miners lose ground
IT WAS a mixed day on the sharemarket, with financial and materials stocks weighing on the benchmark index as investors' attention turned from some solid local earnings to the continuing problems in Greece.
IT WAS a mixed day on the sharemarket, with financial and materials stocks weighing on the benchmark index as investors' attention turned from some solid local earnings to the continuing problems in Greece.The S&P/ASX 200 Index shed 4.7 points to 4262.7.CommSec market analyst Steve Daghlian said the market had little to work with after a weak lead from US markets overnight.The German parliament overwhelmingly approved a second loan package for Greece, but that was expected, Mr Daghlian said.Mining and financial stocks, which represent about 60 per cent of the Australian market, were lower. ANZ was the weakest of the big four banks, losing 20?, or 0.9 per cent, to $21.88. National Australia Bank fell 20?, to $21.88, Commonwealth 29? to $49.15 and Westpac 3? to $20.68.Telstra rose 4?, or 1.2 per cent, to $3.27 after the competition watchdog approved plans to split the company in two. EL & C Baillieu Stockbroking director Richard Morrow said the decision was a "huge landmark" that put "a lot of confidence back into the Telstra market."BHP Billiton was 7? softer at $35.75 while Rio Tinto gained 30? to $67.70.This reporting season has seen "cyclical" stocks those that rise and fall with economic growth significantly re-rated to represent the pick-up in domestic economic activity.As the financial house Goldman Sachs points out, large-cap industrials with exposure to domestic conditions are up about18 per cent since January 1, outperforming defensive stocks by 15 per cent.That has given some of Australia's retailers cause to cheer, with the industry enjoying a decent rally this month, due largely to the cyclical bounce over summer, the chance of rate cuts and the prospect of further mergers and acquisitions (such as Billabong).Over the past seven weeks, retailers Harvey Norman (up 12.2 per cent), Myer (up 16 per cent), and the Reject Shop (up 14.5 per cent) have risen substantially.And Kathmandu, the hiking and outdoors retailer, has had its second-best monthly rise since it listed on the ASX in November 2009. Up 18.9 per cent since February 1, the company has clawed back some losses from the preceding three months (-1.8 per cent in November, -29 per cent in December and -3 per cent in January).When it had its last profit warning, in December 2010, Kathmandu shares bottomed out at $1.20. Yesterday they closed at $1.51.