The Australian sharemarket pushed to a new post-global financial crisis high amid solid expectations for next month's company reporting season despite some shock write-downs over the past week from QBE Insurance Group, Leighton Holdings and Navitas.
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The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each gained 0.6 per cent on Wednesday to 5622.9 points and 5615.1 points respectively, as ratings agency Standard & Poor's affirmed Australia’s AAA rating.
Local shares rose in early trade despite a weak lead from Wall Street. The S&P 500 and Dow Jones Industrial Average fell on Tuesday night ahead of the latest US GDP numbers and the Federal Reserve’s decision on interest rates policy, which is due before the Australian market re-opens on Thursday.
Globally worries are growing that US sanctions against Russia may disrupt markets, but domestically, investors remained focused on company results.
“Declining commodity prices, a stronger than expected dollar and a decrease in consumer spending and sentiment following the federal budget announcement have all contributed to a lowering of company earnings expectations heading into the August reporting season,” Dalton Nicol Reid chief investment officer Jamie Nicol said.
Australia’s biggest mortgage lender, Commonwealth Bank of Australia, led the index on Wednesday up 1 per cent to a record high $83.12. Westpac added 0.3 per cent to $34.36, ANZ gained 0.5 per cent to $33.86 and National Australia Bank rose 0.2 per cent to $35.18.
The two biggest retailers are battling for a share of the banks’ profits. Woolworths climbed 1.6 per cent to $36.79 amid reports it had secured the Woolworths Money trademark. Wesfarmers, owner of Coles, which is also pushing into retail financial services, added 0.2 per cent to $43.65.
According to one retail analyst, the profit margins from selling white-label banking and insurance products are very thin and not expected to be a significant contributor to growth.
Telstra Corporation rose 0.6 per cent to $5.49.
Resources giant BHP Billiton fell 0.2 per cent to $39, while Rio Tinto gained 0.5 per cent to $66.07 as the spot price for iron ore, delivered in China, jumped 1.1 per cent to $US95.30 a tonne. When the ASX closed, Dalian iron ore futures trading in China were tipping a modest fall on Wednesday night.
QBE bounced 4.5 per cent to $11.04 as JP Morgan stuck to its “overweight” recommendation after the stock tumbled 11.1 per cent the previous day following a profit write-down.
ALS was the best-performing stock in the ASX 200 rallying 6 per cent to $7.95, after dipping 6.5 per cent in the previous session following disappointing results.
Mr Nicol noted newly listed companies would face sharp scrutiny over the coming weeks as results were compared to prospectus forecasts. Genworth Mortgage Insurance, which listed in May, rose 9.8 per cent to $3.59 after posting a 40 per cent rise in underlying annual net profit.
