Market edges up, unfazed by US shutdown

The sharemarket edged higher as investors expected the partial US government shutdown to soon be resolved.
By · 3 Oct 2013
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3 Oct 2013
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The sharemarket edged higher as investors expected the partial US government shutdown to soon be resolved.

The benchmark S&P/ASX 200 Index gained 8.8 points to 5215.6, while the broader All Ordinaries added 8.6 points to 5214.9.

With non-essential American public services closed for a second day, investors were optimistic a political solution would be found for the debt ceiling deadlock, Patersons Securities economist Tony Farnham said.

"The market seems to have brushed aside all those sorts of issues," he said. "Investors overseas, and the same for investors here, are trading on the assumption that the politicians will eventually nut out a compromise."

Banking and property stocks led the market higher, although late falls in those sectors saw the main market indices post only modest gains.

Commonwealth Bank gained 32¢ to $71.67, National Australia Bank added 11¢ to $34.52, ANZ was 6¢ higher at $30.90, but Westpac dropped 11¢ to $32.43.

Falling commodity prices hit the resource sector, with BHP Billiton down 18¢ to $35.31, Rio Tinto dropping 78¢ to $60.29 and goldminer Newcrest shedding 45¢ to $10.95.

Linc Energy lost 14.75¢, or 10.5 per cent, to $1.257 after announcing plans to delist from the Australian market and list in Singapore. But uranium miner Paladin Energy added 5¢ to 53¢ after announcing it would cut more jobs and reduce executive pay to save on spending.

The price of gold in Sydney was $US1290.75 an ounce, down $US44.35.

Meanwhile, the dollar was lower after weaker than expected building approvals and trade data.

The fall wiped gains made following the Reserve Bank's cash rate decision, and late on Wednesday it was trading at US93.52¢, down from US94.20¢ on Tuesday.

Local council approvals for the building of new houses, townhouses and apartments fell 4.7 per cent in August, more than expectations of a 1 per cent fall.

Trade data was also weaker, as Australia's total trade balance remained in the red in August with a deficit of $815 million, nearly double the $450 million deficit the market was expecting.

"The Australian dollar was a tad weaker following on from the slightly weaker data," ANZ foreign exchange strategist Andrew Salter said.
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