Modest gains across board
The benchmark S&P/ASX 200 Index added 10.2 points, or 0.2 per cent, to 4719.7, while the broader All Ordinaries gained 11.9 points, or 0.3 per cent, to 4745.7.
Materials ended 0.1 per cent higher, financials and energy both added 0.3 per cent, while IT was the only sector to post a loss, slipping 0.2 per cent.
New home loan approvals slumped 0.5 per cent, defying expectations of a 0.5 per cent rise, while the ANZ job advertisements survey showed a drop of 3.8 per cent in December. Job advertisements are now 20 per cent below February 2012 levels.
"I suspect investors may be interpreting this as saying, 'Well, it makes it more likely we could see a rate cut' and therefore they're really having a careful look at those companies that pay a high fully franked dividend," said JBWere executive director Mike Kendall.
"Overall there seems to be a fairly solid level of confidence as we move through January that the recent gains in our market can be sustained," Mr Kendall said.
The local bourse got some support from regional markets, with most bourses trading higher and Shanghai soaring more than 2 per cent.
Locally, banks were mixed. CBA jumped 0.4 per cent to $61.63 and NAB added 0.7 per cent to $25.74. ANZ slipped 0.2 per cent to $25.21 and Westpac fell 0.3 per cent to $26.50.
The big miners were also mixed, Rio Tinto added 0.3 per cent to $65.99, while rival BHP lost 0.3 per cent to $36.57. Smaller resource companies saw significant gains, Aquila Resources jumped 7.1 per cent to $3.16 and Iluka Resources rose 6.5 per cent to $9.49.
Iron ore, which has surged from $US115.30 at the beginning of December to $US158.50 last week, saw a slight drop to $US154.90 late Friday. Despite the drop, Deutsche Bank economist Phil O'Donaghoe said iron ore maintained a positive outlook for the first quarter of 2013.
Deutsche Bank commodity analysts expect the iron ore price to reach $US170 in the coming weeks.
However, they also noted that the 18 per cent rise in iron ore since July 1, 2012, has not been matched by jumps in coking coal or Chinese steel prices, 28 per cent and 7 per cent lower than July 1 respectively.
"This would suggest gains in iron ore are more related to temporary factors in the market and not a . . . widespread increase in Chinese activity," Mr O'Donaghoe said.
Media enjoyed a good run, with Ten Network rising 6.5 per cent to 33¢, APN News Media up 5.7 per cent to 28¢ and Fairfax Media adding 1.9 per cent to 55¢. Seven West Media fell 3 per cent to $1.78.
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The sharemarket finished slightly higher with modest gains across the board. The S&P/ASX 200 added 10.2 points (0.2%) to finish at 4719.7, while the All Ordinaries rose 11.9 points (0.3%) to 4745.7.
Materials finished 0.1% higher, while financials and energy each added 0.3%. IT was the only sector to post a loss, slipping 0.2%.
New home loan approvals unexpectedly slumped 0.5% (versus expectations of a 0.5% rise) and the ANZ job advertisements survey showed a 3.8% drop in December, with job ads 20% below February 2012 levels. JBWere executive director Mike Kendall said investors may read these signals as making a rate cut more likely, prompting closer interest in companies that pay high fully franked dividends.
Banks were mixed: Commonwealth Bank (CBA) jumped 0.4% to $61.63 and NAB added 0.7% to $25.74, while ANZ slipped 0.2% to $25.21 and Westpac fell 0.3% to $26.50.
Big miners were mixed: Rio Tinto added 0.3% to $65.99 while BHP lost 0.3% to $36.57. Smaller resource companies saw stronger gains — Aquila Resources jumped 7.1% to $3.16 and Iluka Resources rose 6.5% to $9.49.
Iron ore pulled back slightly to US$154.90 after surging from about US$115.30 in early December to US$158.50 last week. Deutsche Bank economists said iron ore maintained a positive outlook for Q1 2013 and expected prices could reach around US$170 in the coming weeks, but they also noted the recent 18% rise hasn’t been matched by coking coal or Chinese steel prices, suggesting some gains may be driven by temporary market factors.
Media stocks enjoyed a strong session: Ten Network rose 6.5% to 33¢, APN News & Media gained 5.7% to 28¢, and Fairfax Media added 1.9% to 55¢. By contrast, Seven West Media fell 3% to $1.78.
Based on the article, everyday investors should keep an eye on domestic economic data (like home loan approvals and job advertisements), signals about potential interest rate moves, performance of dividend-paying financial stocks, commodity trends such as iron ore prices, and how regional markets (for example, a strong Shanghai) are influencing local sentiment. The article also notes a fairly solid level of confidence that recent market gains can be sustained.
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