RESOURCE stocks anchored the market yesterday in what turned out to be an uninspiring day for investors, as bond traders considered the implications of the Queensland Liberal National Party's triumph in the state election.
The S&P/ASX 200 Index shed 7.6 points, or 0.2 per cent, to 4262.8 after giving up early gains.
The Campbell Newman-led LNP romped home with a crushing victory, with plans to return the state's credit rating to triple-A. But analysts warned yesterday that, though the election would be positive for Queensland government bonds, with spreads likely to start pulling back and trading in line with bonds issued by Victoria or New South Wales, Mr Newman's plans would take years to fulfil, with much depending on global financial markets.
Three of the big four banks yesterday hit highs for the year NAB, Westpac and ANZ as fears about a meltdown in Europe's financial markets continued to recede.
Despite the news, Goldman Sachs' Richard Coppleson said Australia's banks were in a "zombie-like" state, with their stocks unlikely to fall too far or rally too high.
Commonwealth Bank rose 32? to $49.98 while ANZ gained 7? to $22.81, Westpac rose 6? to $21.43, and NAB gained 6? to $24.41.
Bank of Queensland said bad loans would lead to a
$91 million first-half loss, but moved to assure investors it was protected from future losses. The shares, which last traded at $7.30, were placed in a trading halt.
Qantas announced it had set up a joint-venture
low-cost carrier called Jetstar Hong Kong to take advantage of the huge market for cheap air fares in China. Its shares rose 3.5? to $1.765.
Aquila Resources shares slipped 4? to $4.94 before being placed in a trading halt pending an announcement about its Isaac Plains coalmine.
Leighton climbed 63? to $23.75 after Tasmanian Premier Lara Giddings said the state would be the first to have its national broadband network rollout completed.
Shares in Retail Food Group rose 4? to $2.75 as
the owner of food brands Brumby's Bakeries and Donut King increased its finance arrangements to allow for more acquisitions.
Gunns said it might seek to raise about $400 million via a new capital raising that could involve a placement of shares to new investors. The stock has been suspended since March 9.
The dollar was higher against the greenback ahead of potential market-moving economic data from the US and Europe. At 5pm, it was trading at US1.0448, up from US1.0387 on Friday.