InvestSMART
The Intelligent Investor Growth Fund is listing on the ASX. Initial Offer closes Friday.

Late bank rally prevents bourse from going backwards

The sharemarket just managed to post its fourth straight day of gains as concerns about a global mining slowdown weighed on investors.

The sharemarket just managed to post its fourth straight day of gains as concerns about a global mining slowdown weighed on investors.

The benchmark S&P/ASX200 index reversed early losses to rise 0.5 points, or 0.01 per cent, to 5035.6 points, thanks to a late rally from the big banks.

Materials stocks generally finished weaker. Rio Tinto shed 18¢, or 0.3 per cent, to $57.50, while BHP Billiton, after an initial 1.2 per cent dip, clawed back losses to finish up 4¢, or 0.1 per cent, to $34.77.

Arab Bank Australia treasury dealer David Scutt attributed the materials sector's lacklustre performance to Caterpillar posting a 43.5 per cent drop in quarterly profit, which was $US960 million ($1.04 billion), or $US1.45 a share, down from $US1.70 billion, or $US2.54 a share, a year earlier.

The US company, is the world's biggest manufacturer of mining and construction equipment, and hence a barometer to the strength of global mining activity, which was rattled after the release of weak manufacturing data from China.

Newcrest Mining shares fell 16¢, or 1.3 per cent, to $12.53 after it forecast a flat year ahead. St Barbara fell 13.5¢, or 20.8 per cent, to close at 51.5¢, after announcing gold operations in the Pacific failed to meet expectations for the year.

Amid the bleak forecasts was a flicker of light. The economy of Australia's fourth biggest trading partner, South Korea, grew at its fastest pace in two years, expanding 2.3 per cent in the April-June quarter, compared with the same period last year. But the risks of a slowing Chinese economy linger.

"In terms of South Korea's importance to Australia's economy, roughly about 5 or 6 per cent of our international trade is via them," Mr Scutt said. But China "takes precedence over all others at the moment", he said.

Among the banks, Commonwealth rose 62¢, or 0.9 per cent, to $73.52. Westpac firmed 31¢, or 1 per cent, to $30.06. NAB was 20¢ higher at $30.87, while ANZ advanced 14¢ to $29.12.

Join the Conversation...

There are comments posted so far.

If you'd like to join this conversation, please login or sign up here

Related Articles