The Australian sharemarket finished the week up 1.4 per cent as bank stocks helped the S&P/ASX 200 Index to close to a six-year high and the case for keeping interest rates on hold for the rest of 2014 firmed, buoying the in-favour banking sector.

In a shortened week characterised by low volumes, the Australian dollar gave up some of its ground against the United States dollar, falling below US93 cents on Wednesday for the first time in more than a week. It was fetching US92.92 cents late on Thursday.

The benchmark finished the last session of the week at 5531 points, up 13.2 points or 0.2 per cent for the day.

The successful initial public offering of auto parts supplier Burson Group on Thursday was a highlight for equities traders, with Burson closing at $2.05 a share compared with its issue price of $1.82 apiece. The company’s former parent, private equity group Quadrant, retains a 19.9 per cent stake in the newly listed business and its price performance is a further vote of confidence by investors in the floats market.

Wall Street headlines were dominated by Apple’s decision on Wednesday to approve $US30 billion in stock buybacks until the end of next year as it bows to the demands of investors to deploy its cash reserves.

However, Apple’s bold move does not pave the way for a rush of share buy-backs, experts say. The decision also underscores the difference between the US market and Australia: In the US, companies have shown a clear preference to repurchase their own stock, and in Australia investors have a bias for capital management strategies centred on dividends.

Perpetual’s head of investment market research, Matthew Sherwood, said: “What’s happening with Apple is they probably have concerns out there about the solid market penetration that Samsung’s getting and they’re wanting to make the stock more attractive to shareholders and investors,” he said. “Buybacks aren’t as prevalent in Australia really because of the imputation laws,” Mr Sherwood explained.

“That really has been a game changer in Australian capital management and companies are far more focused on dividends. That’s been one reason since 1988 that Australian shares have outperformed their peers.” (Dividend imputation was first implemented in 1987).

Australian stocks shrugged off weak manufacturing output data from China earlier in the week to edge closer to a new post-financial crisis high for the ASX 200. The dominant banking sector and record share prices for Westpac Banking Corp and ANZ Banking Group were standouts.

Whitehaven Private Portfolios director Brendon Alford said a narrowing of the yield differential among the banks suggested that investors were still in the hunt for stocks with strong dividend credentials. “Now they’re pretty much in line with each other on 2014 numbers,” he observed.

ANZ closed 0.2 per cent higher to $34.67 on Thursday and Westpac was up 0.5 per cent to $35.78.

Mr Alford also singled out the performance of healthcare group ResMed, which rose 3.1 per cent in the final session to $5.26 on good quarter-on-quarter growth.