The Australian share market has closed higher after weak US inflation figures dampened prospects that the US Federal Reserve and other central banks will raise interest rates later this year.
The benchmark S&P/ASX200 index finished 37.3 points, or 0.66 per cent, higher at 5,730.4 points on Monday, with most sectors making gains.
CMC Markets chief market analyst Ric Spooner said Australian investors were primarily reacting to the US inflation data released on Friday night.
“Weak inflation in the US means there remains a question mark whether the Fed and therefore world central banks will actually increase rates as much as generally considered if inflation gets back to normal,” Mr Spooner said.
“And that makes it very hard to sell stocks unless there’s a more clear and present danger than the current North Korean situation seems to indicate.”
The US consumer price index excluding food and fuel prices rose 0.1 per cent in July, half the pace expected, while the annual rate was unchanged at 1.7 per cent.
Mr Spooner said economic data released by China and Japan on Monday had little influence on the Australian share market.
The market rebound also followed heavy losses on Friday, when fears about rising tensions between the United States and North Korea wiped almost $23 billion off Australian shares.
On the local market on Monday, the big four banks all gained ground, with the embattled Commonwealth Bank rising 1.0 per cent to $81.31 despite news that chief executive Ian Narev will leave by the end of June.
National Australia Bank rose 1.8 per cent to $30.71, Westpac climbed 1.2 per cent to $31.98, and ANZ added 0.6 per cent to $29.43.
Bendigo Bank and Adelaide Bank surged 7.5 per cent to $12.10 after reporting a 4.2 per cent lift in full-year cash earnings to $418.3 million.
In the resources sector, gold miner Newcrest backtracked 1.1 per cent to $21.62, after reporting a seven per cent drop in its annual profit.
Global miner BHP Billiton rose 0.4 per cent to $25.65, and Rio Tinto ascended 0.4 per cent to $63.42.
Electronics retailer JB Hi-Fi’s per cent sagged 3.8 per cent to $24.41 despite its full-year profit rising 13.3 per cent to $172.4 million, helped by November’s acquisition of white goods retailer The Good Guys and growing sales.
Gloves and protective clothing supplier Ansell lost 3.1 per cent to $20.89 after it booked a 7.2 per cent drop in profit to $US147.7 million.
Outdoor and digital advertising group oOh!Media jumped 7.9 per cent to $4.36 after its half-year profit lifted 22.5 per cent thanks to strong revenue growth from its growing network of digital screens.
Rail freight operator Aurizon slipped 1.2 per cent to $5.07 after it posted a full-year loss of $188 million on the back of a $927 million hit from asset impairments and redundancy-related costs.
Meanwhile, the Australian dollar is higher against the US dollar following Friday’s disappointing US inflation data, which weighed upon the greenback.
The Australian dollar was trading at 78.87 US cents, from 78.58 US cents on Friday, at 1630 AEST.
ON THE ASX:
* The benchmark S&P/ASX200 closed up 37.3 points, or 0.66 per cent, at 5,730.4 points.
* The broader All Ordinaries index was up 35.1 points, or 0.61 per cent, at 5,778.6 points.
* The September SPI200 futures contract was up 32 points or 0.57 per cent at 5,673 points.
* National turnover was 2.2 billion securities traded worth $4.5 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 78.69 US cents, from 78.58 on Friday
* 86.47 Japanese yen, from 85.7885 yen
* 66.72 euro cents, from 66.84 euro cents
* 60.67 British pence, from 60.54 pence
* 107.89 NZ cents, from 107.88 cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,287.34 per fine ounce, from $US1,285.47 per fine ounce on Friday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 1.8528, from 1.8301pct
* CGS 4.75pct April 2027, 2.5662, from 2.5354pct
Sydney Futures Exchange prices:
* August 2017 10-year bond futures contract at 97.385 (implying a yield of 2.615pct), from 97.415 (2.585pct) on Friday
* August 2017 3-year bond futures contract at 98.06 (1.94pct), from 98.08 (1.92pct).
(*Bond market closes taken at 1630 AEST previous local session. Currency closes were taken at 1700 AEST.)
