Positives turn negative as retail disappoints
The benchmark S&P/ASX 200 Index gained 8.3 points, or 0.16 per cent, to 5196.6, while the broader All Ordinaries added 10.9 points, or 0.21 per cent, to 5188.9.
"I think we're still to a large degree running off the fumes of yesterday's PMI [purchasing managers' index] data, especially out of China," OptionsXpress market analyst Ben Le Brun said.
That data showed China's industrial sector expanded in August.
But local economic data released on Tuesday came in weaker than expected.
"That might have knocked the stuffing out of what maybe was going to be more of a positive day," Mr Le Brun said.
Australia's current account deficit widened to $9.35 billion in the June quarter, seasonally adjusted, a larger increase than expected, while retail sales increased by just 0.1 per cent in July.
Retail stocks were mixed, with JB Hi-Fi dropping 59¢ to $18.59, David Jones shed 4¢ to $2.81, and Myer gained 2¢ to $2.84.
Airline Virgin Australia gained 1.5¢ to 42¢ after the competition watchdog granted conditional approval to its trans-Tasman alliance with Air New Zealand.
In the resources sector, BHP Billiton gained 20¢ to $35.82, Rio Tinto jumped $1.83 to $61.05, and Fortescue Metals gained 21¢ to $4.54.
Among the banks, Westpac added 12¢ to $31.94, NAB gained 6¢ to $32.91, ANZ lifted 5¢ to $30.05, but Commonwealth Bank dropped 13¢ to $73.55.
The spot price of gold in Sydney finished at $US1390.54 ($1549.57), down $US4.
Meanwhile, a neutral statement on monetary policy from the central bank gave the dollar a bounce. Late on Tuesday, the dollar was trading at US90.34¢, up from US89.84¢.
The RBA kept the cash rate on hold at 2.5 per cent, as it waits for previous rate cuts to take effect.
"The Aussie was on the back foot after retail sales came in weaker than expected but then really all eyes were on the RBA," Easy Forex senior dealer Francisco Solar said. "There weren't too many variations from previous statements. It seems like the markets took it as, 'Well, if we don't have any new negatives to focus on, then it's a positive', and they decided to push the Aussie higher." AAP
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The sharemarket edged higher: the S&P/ASX 200 gained 8.3 points (0.16%) to finish at 5,196.6, while the All Ordinaries added 10.9 points (0.21%) to close at 5,188.9.
Despite weaker local retail sales, markets were supported by stronger-than-expected PMI data from China and a neutral monetary policy statement from the RBA. Analysts said the positive global data and lack of fresh negatives helped lift sentiment.
Retail sales rose only 0.1% in July, while Australia's current account deficit widened to $9.35 billion in the June quarter (seasonally adjusted), a larger increase than expected.
Retail stocks were mixed: JB Hi‑Fi fell 59¢ to $18.59, David Jones slipped 4¢ to $2.81, and Myer gained 2¢ to $2.84, reflecting varied investor responses across the sector.
The RBA kept the cash rate on hold at 2.5% as it waits for earlier rate cuts to feed through. The neutral statement helped the Aussie dollar bounce, and markets interpreted the lack of new negatives as a positive.
The competition watchdog granted conditional approval to Virgin Australia's trans‑Tasman alliance with Air New Zealand, and Virgin Australia shares rose 1.5¢ to 42¢ on the news.
Resources stocks were stronger: BHP Billiton gained 20¢ to $35.82, Rio Tinto jumped $1.83 to $61.05, and Fortescue Metals rose 21¢ to $4.54.
The Sydney spot price of gold finished at US$1,390.54 (A$1,549.57), down US$4. The Australian dollar traded around US90.34¢, up from about US89.84¢ after the RBA's neutral statement.
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