The share market has gained ground as strength in the mining and energy sectors outweighed falls by retailers, while the Australian dollar returned to a three week high.
The benchmark S&P/ASX200 was up 0.4 per cent at 5,789.6 points at the close of trade, overcoming a weak start to the day when the index was down 0.2 per cent.
Three of the big four banks steadied after recent falls caused by concerns about the new federal government levy, with ANZ shares posting their best gains in a month.
Miners and energy producers were boosted by higher commodity prices.
“It was looking relatively grim on the open this morning, with the US lead once again failing to inspire much confidence,” Atlantic Pacific Securities client adviser Gary Huxtable said.
“But with the big four trading near key levels, none bigger than CBA and WBC testing $80 and $30 respectively, we’ve seen signs that investors believe there still remains value in the banks at such levels.”
NAB was the only bank to fall, down 0.5 per cent to $29.86.
The retail sector put a dampener on the day, after the company operating Topshop’s Australian stores entered voluntary administration, and analysts at JP Morgan downgraded their earnings forecasts for Harvey Norman, JB Hi-Fi, Myer and Super Retail Group.
High household debt, rising energy prices and weak wages growth pose major risks for consumers, and the arrival of online giant Amazon will put further pressure on local retailers, the analysts said.
Myer, which holds a 20 per cent stake in Topshop operator Austradia, dropped 4.4 per cent to 87.5 cents, its lowest price in 20 months.
Rebel and Super Cheap Auto owner Super Retail Group fell six per cent, while Harvey Norman dropped 2.1 per cent and JB Hi-Fi was 1.6 per cent weaker.
Automotive Holdings Group, the country’s largest car retailer, plunged 10 per cent after downgrading its full year operating profit forecast.
Amid the retail gloom came news menswear specialist Retail Apparel Group – owner of the Connor and Tarocash chains – had been acquired by African giant The Foschini Group, ending previous plans to pursue an ASX listing.
Ansell was one of the market’s best performers, rising 4.3 per cent as it announced the sale of its condom business and a $353 million share buyback.
The Australian dollar quickly rebounded from the impact of China’s credit rating downgrade on Wednesday, hitting the three-week high of 75.17 US reached on Tuesday.
The US dollar has weakened after the latest statement from the US Federal Reserve indicated it will take a more cautious than expected approach after its next rate hike, which the market is forecasting will be in June.
ON THE ASX:
* The benchmark S&P/ASX200 was up 20.6 points, or 0.36 per cent, at 5,789.6 points at the close.
* The broader All Ordinaries index was up 17.3 points, or 0.3 per cent, at 5,828.8 points.
* The June SPI200 futures contract was up 21 points, or 0.36 per cent, at 5,795 points.
* National turnover was 1.97 billion securities traded worth $6.3 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 74.91 US cents, from 74.59 US cents on Wednesday
* 83.70 Japanese yen, from 83.46 yen
* 66.71 euro cents, from 66.73 euro cents
* 57.71 British pence, from 57.50 pence
* 106.45 New Zealand cents, from 106.41 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,257.76 per fine ounce, up $US7.95 from $US1,249.81 on Wednesday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 1.6746pct, from 1.7050pct
* CGS 4.75pct April 2027, 2.438pct, from 2.485pct
Sydney Futures Exchange prices:
* June 2017 10-year bond futures contract at 97.53 (implying a yield of 2.47pct), from 97.49 (2.51pct) on Wednesday
* June 2017 3-year bond futures contract at 98.28 (1.72pct), from 98.25 (1.75pct).
(*Currency closes taken at 1700 AEST previous local session, bond market closes taken at 1630 AEST previous local session)
