Stocks edge higher on overseas pick-up
THE sharemarket closed higher yesterday for a second straight day despite giving up early gains after official figures showed the economy grew at almost twice market expectations.
THE sharemarket closed higher yesterday for a second straight day despite giving up early gains after official figures showed the economy grew at almost twice market expectations.The benchmark S&P/ASX 200 Index closed up 11.6 points, or 0.3 per cent, at 4055.3.The market opened about 0.4 per cent higher as investors took their cues from a positive night on overseas markets.Investors then reacted positively to figures that showed the domestic economy grew by a better than expected 1.3 per cent in the March quarter. For the year to March 31, gross domestic product increased by 4.3 per cent.However, the sharemarket rally petered out in the afternoon as investors dug a bit deeper behind the headline numbers.Lonsec senior client adviser Michael Heffernan said while the GDP data looked good on the surface, it was not necessarily a true indication of how the economy was travelling."There was a bit of ebullience after the national accounts figures came out," he said."However, closer analysis shows that the major reason why real GDP went up was because overall prices went down, largely due to export prices falling."The best-performing sector was gold, which rose 2.7 per cent. At the Sydney close, spot gold was up $US9.53 at $US1625.95 an ounce.Other big market sectors to post gains included metals and minerals stocks (up 0.5 per cent) and materials (up 0.4 per cent).IG Markets strategist Stan Shamu said the growth numbers prompted a sharp rise in the dollar, which capped gains in equity markets as industrials stocks struggled, falling 0.6 per cent.The big four banks ended mixed, with the financial sector overall gaining 0.18 per cent.While ANZ firmed 2? to $21.34 and CBA rose 5? to $50.05, NAB backpedalled 30? to $22.25 and Westpac was down 24? at $20.35.None of the big four have announced their response to the Reserve Bank's 25-basis-point easing in the cash rate.Qantas Airways reached fresh lows as investors continued to react negatively to Tuesday's shock profit downgrade. The stock fell 3?, or 2.6 per cent, to a record low of $1.125, extending Tuesday's 19 per cent decline.National turnover was 1.6 billion securities worth $4 billion, with 549 stocks up, 390 down and 406 unchanged.