Ups and downs, but bourse on course
STOCKS inched up to their highest close in 14 months yesterday, but the market shed much of its initial optimism as investors lost faith in an imminent Spanish bailout request.
STOCKS inched up to their highest close in 14 months yesterday, but the market shed much of its initial optimism as investors lost faith in an imminent Spanish bailout request.Shareholders also had to make sense of a confusing trade balance a figure that appeared far worse than it was, thanks to a major data revision by the Bureau of Statistics.But overall, despite a positive start and some lost ground through the day, the bourse still managed to extend Tuesday's gains.The benchmark S&P/ASX 200 Index rose 5.6 points, or 0.1 per cent, to 4438.6, its highest close since August 2 last year.Shareholders had been betting that Spain's government was close to asking European authorities for financial help, but reports overnight suggested otherwise.Then new figures showed Australia recorded a trade deficit of more than $2 billion in August, which blasted clear of the expected $685 million deficit.But analysts said the deficit was not as bad as it looked: an ABS data revision meant $1 billion was unexpectedly added to the previous month's deficit, which then carried over to August. But news of the actual figure increased pressure on the dollar, which had already been hit by the Reserve Bank's decision to cut the cash rate by 25 basis points on Tuesday.This added to speculation that it would soon have to lower rates again to cushion the impact of slowing global growth. The dollar was struggling to hold above $US1.02 in late trade yesterday."Overall, the number may be shocking, but we don't think it's bad enough to prompt a rethink of the monetary policy outlook," TD Securities Asia-Pacific macro strategist, Alvin Pontoh, said."At the margin, though, the poor tone of today's report increases the chance that the RBA follows up next month with another 25 basis points rate cut to 3 per cent, bringing the cash rate back to 2009 lows."The four big banks gave up some gains to close mixed and were yet to announce their responses to the RBA move.ANZ was up 6? at $25.05, CBA shed 4? to $56, NAB was 14? higher at $25.95 and Westpac was flat at $25.16.Meanwhile, APN News and Media slipped 1.5?, or 3.5 per cent, to 41.5?, after the company confirmed it was still reviewing its New Zealand print assets. Speculation that a buyer had been found fuelled a surge in its share price.Boart Longyear rose 1.5? to $1.67 after the world's largest drilling company shocked the market by sacking its chief executive, Craig Kipp, as it tried to tackle its plunging share price, which is more than 30 per cent weaker in the past month.