Shares continue winning streak
The sharemarket had a solid run this week, closing just shy of the 4500 points level, after the Reserve Bank's rate cut and rising global commodity prices causing investors to jump into financial and resource stocks.
The sharemarket had a solid run this week, closing just shy of the 4500 points level, after the Reserve Bank's rate cut and rising global commodity prices causing investors to jump into financial and resource stocks.The benchmark S&P/ASX200 index hit a 14-month record high on Wednesday, and then extended those gains over the following two days, to be up 2.4 per cent for the week. It has now risen for seven days in a row, its longest winning streak since April 2010.The earlier part of the week had investors reacting to Tuesday's interest rate cut by putting money in high-yielding financial stocks, while yesterday they responded to high commodity prices by embracing resources stocks, which rose nearly 2 per cent.Gold prices offshore hit nine-month highs of $US1796.50 an ounce on Thursday night.For the week, the All Ordinaries Index rose 107.5 points, or 2.4 per cent, to 4513.8.The Australian dollar lost a cent against the greenback through the week, a direct consequence of both the RBA's rate cut of 25 basis points, and disappointing retail sales and building approval figures."Those last two numbers were a setback," the Westpac currency strategist Sean Callow said."We had a big revision to building approvals, and the details of the retail sales weren't very encouraging. And it was very lop-sided by state, so Western Australia had a big bounce while the rest [of the states] were very lacklustre. That's not what you want to see," he said.For the week, the big four banks' shares rose after the RBA cut rates.ANZ gained 75?, or 3 per cent, at $25.50 Commonwealth Bank climbed $1.08, or 2 per cent, to $56.85 National Australia Bank rose 82?, or 3.2 per cent, to $26.31 and Westpac added $1.03, or 4 per cent, at $25.88.Following the RBA move, NAB and Commonwealth Bank reduced interest rates for their standard variable home loans by 20 basis points yesterday. Westpac later lowered its standard variable rate by 18 basis points. Investors await ANZ's action next week.Bank of Queensland slipped 3?, to $7.55, after it prepared to post the first full-year loss by an Australian bank in 20 years, thanks to its exposure to the struggling south-east Queensland property market.Qantas gained 3?, or 2.5 per cent, at $1.25, after it sold its 50 per cent stake in the road freight operator Star Track Express, to Australia Post and then moved to take full ownership of the air freight business Australian air Express. The High Court also ruled against the airline's fight to be exempt from paying $34 million in GST on unused flight bookings.Macquarie Radio Networks fell 9?, or 14 per cent, to 55?, as the list grew of sponsors pulling out of the broadcaster Alan Jones's radio program following his comments about the late father of the Prime Minister, Julia Gillard.Arrium Limited jumped 25.5?, or 47 per cent, to 80?, after it said it had rejected an unsolicited $1 billion takeover offer from a consortium of Australian and South Korean companies. It also said it expected total iron ore exports to reach between 8 million tonnes and 9 million tonnes for 2012-13 as port capacity at Whyalla increased from 12 million tonnes to 13 million tonnes.