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".
Frequently Asked Questions about this Article…
How did the Queensland state election affect the ASX 200 and broader Australian sharemarket?
The Queensland LNP victory anchored mixed market moves — resource stocks led activity while the benchmark S&P/ASX 200 slipped 7.6 points (about 0.2%) to 4262.8 and the All Ordinaries eased to 4355.2. Analysts said the result could be positive for Queensland government bonds over time, but any return to an AAA credit rating would take years and depend on global financial conditions.
What happened to major bank shares after the election and market news?
Three of the big four banks — NAB, Westpac and ANZ — hit year highs as fears of a European financial meltdown eased. Commonwealth Bank, ANZ, Westpac and NAB were trading at roughly $49.48, $22.81, $21.43 and $24.41 respectively, though analysts such as Goldman Sachs' Richard Coppleson warned Australian banks were in a 'zombie-like' state with limited upside or downside.
Should everyday investors be worried about Bank of Queensland's announced loss?
Bank of Queensland said bad loans would lead to a $91 million first‑half loss and its shares were placed in a trading halt (last traded at about $7.30). The bank moved to reassure investors it was protected from future losses, but shareholders should watch for updates once the trading halt is lifted and management provides more detail.
How did the Australian dollar move and what could influence it next?
The Australian dollar was stronger against the US dollar, trading around US$1.0448 (up from about US$1.0387 on Friday). Upcoming economic releases from the US and Europe were flagged as potential market movers that could push the currency either way.
What was the market reaction to Qantas’ announcement about Jetstar Hong Kong?
Qantas said it had set up a joint‑venture low‑cost carrier called Jetstar Hong Kong to tap the big low‑cost travel market in China. The announcement was positively received by investors and Qantas shares rose to around $1.765.
Which resource and mining companies featured in the update and what happened to their shares?
Aquila Resources slipped to about $4.94 before placing its shares in a trading halt pending an announcement about its Isaac Plains coal mine. Separately, Gunns was suspended from trade (last at around 16 cents) and indicated it might seek roughly $400 million in new capital.
How did property and infrastructure news affect related stocks?
CFS Retail Property Trust rose to about $1.78 after selling a 50% stake in Myer’s Brisbane shopping centre for $366 million. Leighton’s shares climbed to roughly $23.75 after Tasmania’s premier said the state would be first to complete the national broadband network rollout, which investors treated as positive for the company.
What did Origin Energy say about its LNG project and how did investors respond?
Origin Energy said it was still considering whether to sell down its equity in the Australia Pacific LNG project to help pay for a second processing 'train'. Despite that uncertainty, Origin’s shares rose to about $13.15 on the day.
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