The Australian share market gave away most of its early gains but still finished slightly higher as weakness from most of the big banks countered support from an upbeat outlook on the US economy and a profit upgrade from market heavyweight CSL.
“It was a day of two halves,” said Atlantic Pacific Securities client adviser Gary Huxtable.
He said the local bourse started well, with investors buoyed by US Federal Reserve chair Janet Yellen’s upbeat economic outlook for the US.
Ms Yellen said overnight that the US economy was strengthening and warranted a gradual hike in interest rates.
Investors also drew confidence from blood products and vaccines supplier CSL’s upgrade of its full-year profit guidance.
But Mr Huxtable said the market’s early strength was soon met by selling pressure among the big banks.
He said the banks had risen 15 to 20 per cent in the last couple of months and had gone up too far, too fast.
“It just looks like everyone is continuing to lock in profits,” Mr Huxtable said.
Also, investors were nervous about potential downside risks to the market arising from the policies of US president-elect Donald Trump who will be inaugurated on Friday.
Mr Huxtable said jobs figures released on Thursday had no impact on the market. The data showed that Australian jobs growth last year was the weakest in three years.
Westpac dropped 10 cents to $32.33, National Australia Bank dumped 16 cents to $30.42, ANZ fell 22 cents to $29.89, but Commonwealth Bank nudged up one cent to $82.67.
Blood products and vaccines supplier CSL surged $12.38, or 12.49 per cent, to $111.50. CSL expects net profit for the 12 months to June 30 to grow by between 18 and 20 per cent on a constant currency basis.
In the resources sector, global miner BHP Billiton added 17 cents to $26.69, Rio Tinto improved 39 cents to $63.53, and Fortescue Metals put on 15 cents at $6.25.
Diversified miner South32 slipped three cents to $2.78 as it posted lower first-half production in several of its commodities.
Oil and gas producer Woodside Petroleum surrendered 30 cents to $32.08. Woodside has forecast a drop in oil and gas production in 2017, despite achieving its full-year guidance range for the previous year.
Among other stocks, Bega Cheese jumped 68 cents, or 15.18 per cent, to $5.16 after agreeing to buy the iconic Vegemite spread and other well-known brands for $460 million from Mondelez International.
Meanwhile, the Australian dollar has lost ground after the greenback rallied on Ms Yellen’s speech. The Aussie was at 75.23 US cents at 1700 AEDT.
ON THE ASX:
* On Thursday, the benchmark S&P/ASX200 was up 13.4 points, or 0.24 per cent, at 5,692.2 points.
* The broader All Ordinaries index was up 11.7 points, or 0.2 per cent, at 5,745.4 points.
* The March SPI200 futures contract was up eight points, or 0.14 per cent, at 5,637 points, with 30,270 contracts traded.
* National turnover was 2.57 billion securities traded worth $5.26 billion.
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 75.23 US cents, from 75.44 cents on Wednesday
* 86.199 Japanese yen, from 85.48 yen
* 70.71 euro cents, from 70.61 euro cents
* 61.28 British pence, from 61.16 pence
* 105.3 New Zealand cents, from 104.91 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,202.50 per fine ounce, down $US9.50 from $US1,212.00 on Wednesday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 5.25 per cent March 2019, 1.8816pct, up from 1.8467pct on Wednesday.
* CGS 4.25pct April 2026, 2.7023pct, up from 2.6258pct.
Sydney Futures Exchange prices:
* March 2017 10-year bond futures contract at 97.21 (implying a yield of 2.79pct), down from 97.28 (2.72pct) on Wednesday.
* March 2017 3-year bond futures contract was 97.95 (2.05pct), down from 98.0 (2.0pct).
(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)
SOURCE: IRESS
