Rally after rates cut is short lived
THE sharemarket inched up to a fresh nine-month closing high, boosted by miners on signs of a stronger global economy, though bank stocks eased as ANZ margins shrank.
THE sharemarket inched up to a fresh nine-month closing high, boosted by miners on signs of a stronger global economy, though bank stocks eased as ANZ margins shrank.The S&P/ASX200 index closed up 6.4 points, or 0.1 per cent, to 4435.9, and the broader All Ords gained 7.5 points, or 0.2 per cent, to 4504.8.Among the major sectors, materials gained 0.6 per cent but financials fell 0.3 per cent.Markets across the region rallied, but investors appeared to take a cautious approach to consolidate the big gains made after yesterday's decision by the Reserve Bank to lower interest rates 50 basis points."It was quite an underwhelming performance, a bit of a misfire compared to the performance we saw from Wall Street overnight," CMC Markets trader Tim Waterer said. "Much of the initial elation from the 50 basis point cut from the RBA seems to have worn off."Mr Waterer said decent manufacturing numbers in the past 48 hours from several countries including China had helped spur the market.Banks were lower after the ANZ said income was hit by a 13 basis point fall in margins in its Australian operations, although it said first-half profit rose 5 per cent to a record as the growing international operations buoyed the bottom line. Its shares slipped 19? to $23.80.National Australia Bank eased 11? to $25.10, and Commonwealth Bank was 17? lower at $52.68 and Westpac fell 14? to $22.69.NAB was the only big four bank to cut its home loan rates yesterday, dropping its variable mortgage rate by 0.32 of a percentage point.The resources sector was boosted by stronger commodities prices, including crude oil.BHP Billiton rose 28? to $36.25 and Rio Tinto added 62? to $66.41.Bauxite miner Alumina was flat at $1.145 after it said pricing and demand would remain subdued in 2012.Origin Energy rose 23? to $13.74 after it struck a deal to supply gas to a joint venture of major energy suppliers.Woodside Petroleum was up 46? at $36.66 after revealing that it had begun shipping LNG at its second Pluto project this week.Among other stocks, APN News & Media was 0.5? at 84? as it said its New Zealand media properties were under strategic review and flagged a fall in first half net profit.News Corp rose 1.3 per cent to $19.39, unperturbed by British lawmakers declaring Rupert Murdoch unfit to run a major international company after the illegal phone hacking affair that has corroded his global media empire.Pallets supplier Brambles was 15? up at $7.40 as it said it was on track to meet its full year profit target, after unveiling a 33 per cent rise in sales.The release of employment data in the US overnight might affect trading today, Mr Waterer said.