Local shares took a positive lead from overseas markets. Photo: AFR
Australian shares snuck to a six-year high on Monday despite a mixed performance from the big banks and falls in the biggest miners.
Both the benchmark S&P/ASX 200 Index and the broader All Ordinaries Index added 0.2 per cent, on Monday, to 5539.9 points and 5528.7 points respectively, the benchmark’s highest close since June 2008.
Local shares took a positive lead after major equity markets in the United States and around Europe closed higher on Friday night despite concerns about increased geopolitical risk following the shooting down of a passenger jet over a region of Ukraine occupied by pro-Russian insurgents.
“Recalling how skittish the market was at the start of the year when Russia first moved to annexe Ukraine’s Crimean peninsula it has been surprising to see equities rise over the past couple of sessions,” Zurich Financial Services senior investment strategist Patrick Noblesaid.
“That the market is currently so easily dismissive of global risk events, such as the MH17 air disaster and recent unrest in Iraq, despite higher equity valuations is evidence of a low volatility malaise,” he said.
Consumer discretionary was the best-performing sector on Monday, up 0.8 per cent, led by a 1.3 per cent lift in Crown Resorts to $15.48. The casino operator has struck a deal with China’s Greenland Holdings Group to develop the Queen’s Wharf casino and resort project in Brisbane.
In other company news, property developer Australand dropped 0.2 per cent to $4.49 after showing first half net profit rose 49 per cent despite revenue dropping 15 per cent.
National Australia Bank added 0.2 per cent to $34.25, while Commonwealth Bank of Australia added 0.1 per cent to $81.36. Westpac Banking Corporation was unchanged at $33.90, and ANZ Banking Group fell 0.1 per cent to $33.39.
A strong day for the insurers helped boost the financial services sector. QBE Insurance Group did the most to lift the bourse, jumping 2 per cent to $11.82, Suncorp Group and Insurance Australia Group each added 1 per cent to $13.95 and $6 respectively.
Wesfarmers, owner of Coles, rose 0.1 per cent to $43.52, while Woolworths fell 0.1 per cent to $35.91. Telstra Corporation was steady at $5.43.
The mining sector fell after the spot price for iron ore, delivered in China, fell 0.9 per cent on Friday night to $US96.60 a tonne. Resources giant BHP Billiton dropped 0.4 per cent to $38.22, despite high expectations for its quarterly production report due on Wednesday.
Main rival Rio Tinto fell 0.9 per cent to $63.70, while iron ore miner Fortescue Metals Group lost 0.4 per cent to $4.57, despite both producers delivering pleasing reports last week.
The 28 per cent fall in the iron ore price since January has hit the smaller producers hardest. Arrium lost 3.2 per cent to 75.5¢ after reporting record quarterly iron ore sales but significantly lower sales prices as the bulk commodity’s price is battered by excess inventory and stricter credit standards in China. Atlas Iron dropped 4.3 per cent to 56¢ after Macquarie Group downgraded it to a sell rating equivalent on Friday.
Energy stocks were mostly higher as Brent crude oil remained steady around $US107.22 a barrel despite fears sanctions against Russia could push up global energy prices.
Caltex Australia lifted 4.1 per cent to $24 after its latest refiner margin update led to speculation analysts will increase earnings estimates. Oil and gas junior Antares Energy jumped 8.5 per cent to 64¢ after emerging from a trading halt to reveal it has issued a new terms sheet to a confidential takeover bidder.
Utilities was the worst-performing sector, down 0.3 per cent, as AGL Energy shed another 1 per cent to $14.80 following last week’s profit writedown in the wake of the carbon tax repeal. APA Energy added 1 per cent to $7.15 after revealing plans to develop a gas pipelines into the WA goldfields.