Investors chasing yield ignore offshore leads
The benchmark S&P/ASX 200 Index jumped 28.3 points, or 0.6 per cent, to 5125.8, while the broader All Ordinaries gained 25.6 points, or 0.5 per cent, to 5108.3.
Softer than anticipated US GDP data was expected to weigh on local shares, but the search for yield prevailed.
Banking stocks had the strongest run, with the sector up 1 per cent. Commonwealth Bank and Westpac continued to push record highs, rising 1.1 per cent to $71.60 and 1.7 per cent to $33.12 respectively. NAB added 1.4 per cent to $33.08 and ANZ edged up 0.7 per cent to $30.10.
ANZ will on Tuesday report its first-half earnings, with market expectations of a $3 billion profit. Westpac, which is expected to record profit of $3.5 billion, will report on Friday.
"The buying in the banking sector has been broadly based, investors are still happy to go out there buying these high-yielding stocks," said Ord Minnett senior investment adviser Tony Paterno.
Mr Paterno said that with interest rates remaining at the lower end of the spectrum, investors were seeking higher returns for their cash.
Mining stocks continued to struggle after China's steel industry body warned that a sharp production increase was unlikely.
Rio Tinto slid 0.8 per cent to $55.36, despite the miner's report that a US copper mine, affected by a landslide, would start transporting ore within several days. Rival BHP was flat at $32.54 and Fortescue Metals fell 2 per cent to $3.50.
Aquila shares plunged 11.1 per cent to $1.81 after its Japanese partner pulled out of a coal exploration partnership. This will likely affect the company's attempt to raise $7.4 billion for an iron ore project in Western Australia.
Tabcorp shares jumped 1.5 per cent to $3.39 after it reported a 2.6 per cent rise in third-quarter revenue to $480.3 million.
Markets across the Asia-Pacific were little moved on Monday, a public holiday in China and Japan.
The spot price of gold in Sydney finished at $US1470.50 an ounce, having rebounded from a low of $US1461.90 in weekend trading.
The Aussie closed firmer, pushing above US103¢ and moving in line with the rising price of gold.
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The ASX finished higher because investors continued a search for high-yielding stocks, which outweighed softer global leads (including weaker US GDP data). The S&P/ASX 200 rose 28.3 points (0.6%) to 5125.8 and the All Ordinaries gained 25.6 points (0.5%) to 5108.3 as yield-seeking buying prevailed.
Banking stocks led the gains, with the sector up about 1%. Major banks rose as investors bought high-yielding names: Commonwealth Bank +1.1% to $71.60, Westpac +1.7% to $33.12, NAB +1.4% to $33.08 and ANZ +0.7% to $30.10. Ord Minnett senior investment adviser Tony Paterno said buying in the banking sector was broadly based as investors hunt for higher returns.
The article notes ANZ was set to report its first-half earnings (market expectation around a $3 billion profit) and Westpac was expected to report a roughly $3.5 billion profit later in the week. These results are being watched closely given the sector’s recent strength.
With interest rates remaining at the lower end of the spectrum, investors are seeking higher returns for their cash, which has pushed demand for high-yielding stocks—particularly bank shares—despite mixed global signals.
Mining stocks struggled after China’s steel industry body warned a sharp production increase was unlikely. The article cited Rio Tinto sliding 0.8% to $55.36 (despite news a US copper mine would soon resume transporting ore), BHP flat at $32.54, and Fortescue Metals falling 2% to $3.50.
Aquila shares plunged 11.1% to $1.81 after its Japanese partner pulled out of a coal exploration partnership. The withdrawal is likely to affect Aquila’s attempt to raise $7.4 billion for an iron ore project in Western Australia.
Tabcorp shares jumped 1.5% to $3.39 after the company reported a 2.6% rise in third-quarter revenue to $480.3 million, which lifted investor sentiment toward the stock.
The spot price of gold in Sydney finished at US$1,470.50 per ounce, rebounding from a weekend low of US$1,461.90. The Australian dollar closed firmer, pushing above US103¢, and moved in line with the rising gold price.
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