Positivity buoys stocks across the board
THE sharemarket closed at its highest in 3 months yesterday on positive earnings reports and encouraging commentary from the Reserve Bank.
THE sharemarket closed at its highest in 3 months yesterday on positive earnings reports and encouraging commentary from the Reserve Bank.The benchmark S&P/ASX 200 Index rose 19.1 points, or 0.4 per cent, to 4383.4.Gains were broad based, with materials rising 0.4 per cent, financials adding 0.3 per cent and energy stocks jumping 1.4 per cent. Consumer staples were among the few losers, dropping 0.3 per cent.The RBA said in its August 7 board meeting minutes the full effects of previous rate cuts had yet to be felt and there were signs of improved activity in parts of the economy not benefiting from the mining boom.Investors were also hopeful that the European Central Bank can trim borrowing costs and help restore confidence in the euro bloc."We saw the market move towards 4400, and we did touch that, but then rejected it late with a bit of profit-taking," IG Markets market strategist Stan Shamu said. "Around those levels everyone starts thinking, 'Hang on, have we run a bit too far, what's going on, what are the actual drivers?'"We have European risk kicking in midweek, with quite a few talks going on with Germany, Greece and France. That will probably result in a few comments filtering through markets as the week progresses."On the local front, engineering company Monadelphous beat expectations with net profit of $137.3 million. Its shares closed up $1.56, or 7.2 per cent, at $23.26.The result continues a theme of February's earnings reporting season, when mining services companies were the star performers beating the miners they work for.Packaging company Amcor lost 6? to $7.66 despite lifting net profit for the 12 months to June 30 to $412.6 million, boosted by growth in emerging markets and benefits from acquisitions.Steel maker Arrium, previously known as OneSteel, surged 11.7 per cent, or 9.5?, to 90.5? despite reporting a 75 per cent slump in net profit.Rio Tinto lost 9? to $54.41, while BHP Billiton, which will present its earnings today, rose 24? to $33.27.Westpac dropped 10? to $24.87, Commonwealth Bank was flat at $55.80, National Australian Bank rose 46? to $25.37, and ANZ improved 17? to $24.95.Property developer Mirvac eased 1? to $1.36 after it posted a net profit of $416.1 million in the year to June 30, more than double that of the previous year.Takeover target Consolidated Media reported a 15.6 per cent slide in net profit and its shares were flat at $3.44.