Investors unmoved by Qld election

Resource stocks anchored the sharemarket yesterday on what turned out to be an uninspiring day for investors, as bond traders considered the implications of the Queensland Liberal National Party's triumph in the state election.

Resource stocks anchored the sharemarket yesterday on what turned out to be an uninspiring day for investors, as bond traders considered the implications of the Queensland Liberal National Party's triumph in the state election.

The benchmark S&P/ASX 200 index shed 7.6 points, or 0.2 per cent, to 4262.8, and the broader All Ordinaries Index slipped 5.5 points, or 0.1 per cent, to 4355.2.

The Campbell Newman-led LNP romped home with a crushing victory on the weekend, with plans to return the state's credit rating to AAA.

But analysts warned yesterday that though the election would be positive for Queensland government bonds, with spreads likely to start pulling back and trading in line with bonds issued by Victoria or NSW, Newman's plans would take years to fulfil, with much depending on global financial markets.

Three of the big four banks - NAB, Westpac and ANZ - hit highs for the year as fears about a meltdown in Europe's financial markets continued to recede.

Despite the news, Goldman Sachs's Richard Coppleson said Australia's banks were in a "zombie-like" state, with their stocks unlikely to fall too far or rally too high.

Commonwealth Bank rose 32? to $49.48, ANZ gained 7? to $22.81, Westpac rose 6? to $21.43 and NAB added 6? at $24.41.

Bank of Queensland said bad loans would lead to a $91 million first-half loss, but moved to assure investors it was protected from future losses. Its shares were placed in a trading halt, and last traded at $7.30.

The Australian dollar was higher against the US dollar, with potential market-moving economic data from the US and Europe yet to come in.

At 5pm, the local currency was trading at US104.48?, up from US103.87? on Friday.

Qantas announced it had set up a joint-venture low-cost carrier called Jetstar Hong Kong to take advantage of the huge market for cheap airfares in China. Its share price rose 3.5? on the news, to $1.765.

Aquila Resources slipped 4? to $4.94, before placing its shares in a trading halt pending an announcement about its Isaac Plains Coal Mine.

CFS Retail Property Trust was up 2? at $1.78 after selling a 50 per cent stake in Myer's Brisbane shopping centre to a fellow property investment trust for $366 million.

Gunns shares were suspended from trade, and last traded at 16?. The woodchipper said it might seek to raise about $400 million in capital that could involve a placement of shares to new investors.

Shares in the construction group Leighton climbed 63? to $23.75, after Tasmania's Premier, Lara Giddings, said the state would be the first to have its national broadband network rollout completed.

Origin Energy rose 5? to $13.15 despite saying it was still considering whether to sell down its equity in the Australia Pacific liquefied natural gas project in Queensland to pay for a second processing "train".

Related Articles