Market upbeat on US deadlock hopes
The sharemarket was set to lose ground this week - but then it shot up on Friday as investors responded to news that US politicians might avoid a collision on the debt ceiling issue.
Friday's rally helped the local market close nearly 0.5 per cent higher for the week, not bad given the previous four days had been dominated by talk of a seemingly deadlocked US Congress.
"Investors are piling back in," Australian Stock Report head of research Geoff Saffer said on Friday.
"Today's gains are being driven by the first sign of compromise in the US debt ceiling political deadlock."
For the week, the benchmark S&P/ASX 200 gained 22.9 points, or 0.4 per cent, at 5230.9 points, while the broader All Ordinaries gained 23 points, or 0.4 per cent, at 5228.8 points.
Market watchers were surprised that local investors had been reacting so calmly during the week to all the uncertainty about the state of US politics. Some put it down to complacency, others to the feeling that we have seen this before in the US and that it is nothing new.
Then late in the week, global equity markets surged as House Republicans in the US proposed to raise the US debt ceiling until November 22, but not to reopen the government.
It provided the "good news" investors were waiting for.
Meanwhile, economists said news that US Fed vice-chairman Janet Yellen - a co-architect with Ben Bernanke of the Fed's response to the global financial crisis - had been confirmed as the nomination to replace Mr Bernanke was viewed well by markets.
For the week, Bank of Queensland gained 52¢, or 4.9 per cent, at $11.10, after the bank lifted its full-year cash profit to $251 million due to a reduction in bad debts.
Cash Converters slipped 4¢, or 3.6 per cent, at $1.21. The lender and second-hand goods retailer is facing a class action for allegedly charging extremely high interest rates.
Leighton Holdings is up $1.05, or 6.3 per cent, at $17.79, despite its bribery scandal prompting Melbourne investor Mark Elliott to sue the construction giant.
Westpac Bank is up 57¢, or 1.8 per cent, at $32.99, after it announced that it would pay $1.45 billion to purchase Lloyds Banking Group's Australian motor and equipment finance business.
Woodside Petroleum is up 10¢, at $38, after it announced that it had started its $5 billion North Rankin redevelopment project and exported its first gas to the Karratha gas plant.
Transurban gained 24¢, or 3.5 per cent, at $7.04. The toll road owner has recorded a 14 per cent rise in revenue for the three months to the end of September, thanks in part to the end of upgrade work on Sydney's M2 Motorway.