ASX 200 ends session a whisker short of all-time record

The ASX defied a heavy mining drag to close just 10 points short of an all-time record.

Pedestrians are seen reflected on the Australian Stock Exchange trading board in Sydney. Picture: AAP

The local sharemarket defied a drag from the heavyweight mining sector to close just 10 points off the benchmark’s record.

At the close of trade, the ASX benchmark S&P/ASX200 had added 41 points or 0.61 per cent to 6818, just shy of the 2007 record at 6828.7.

The broader All Ordinaries index set new records again, adding 40 points or 0.58 per cent at 6901.9.

Strength in the US spurred an early rise, and comments from Reserve Bank Governor Philip Lowe only added to the market positivity.

Dr Lowe defended the central bank’s inflation target of between 2 and 3 per cent, fuelling speculation of further rate cuts.

His comments prompted a further slip in Australian 10-year bond yields, to a new record low of 1.245 per cent, while the Australian dollar pulled back to US69.70.

Jun Bei Liu Tribeca portfolio manager said that volumes weren’t particularly strong but that people were affirming their positions ahead of the reporting season.

“We expect pretty high volatility this reporting season given that it’s a pretty expensive market with quite high earnings expectations,” she said.

The materials sector was the only to finish in the red, after the price of iron ore slumped 2.5 per cent overnight. Brazilian mining giant Vale was granted approval to restart production following a halt after the fatal tailings dam disaster in January this year, and is now set to add 5 million tonnes of the steelmaking mineral into supply this year.

Rio Tinto shares dropped 4.2 per cent to $96.29, with added weight after a downgrade from Credit Suisse while BHP lost 1.8 per cent to $40.59.

Fortescue wound back by 5.5 per cent to $8.25 after it told the market that iron-ore shipments were slightly lower for the full-year as it forecast a rise in exports for the year ahead.

Financials were strong across the board, ANZ gained 1.1 per cent to $27.96, Commonwealth Bank added 0.79 per cent to $83, NAB edged higher by 1 per cent to $28.61 and Westpac finished up 1.65 per cent to $28.86.

Macquarie bucked a soft start to close 0.9 per cent higher at $130.48 after flagging a softer full-year profit, set to snap a seven-year run of growth for investment bank.

Financial services group IOOF shot up 6.92 per cent to $5.87, making it the best performer in the top 200, after reporting funds under management and administration had lifted 3.5 per cent in the June quarter.

Elsewhere, car retailer AP Eagers added 1.18 per cent to $10.33 after it received ACCC approval for its $2.3 billion acquisition of Automotive Holdings Group. Meanwhile, the target gained by 1.38 per cent to $2.94.

GrainCorp retraced by 1.9 per cent to $8.63 after the ACCC raised concerns about the $350 million offload of its liquid terminal assets to ANZ Terminals.

Newcrest lost 0.68 per cent to $33.79 despite its announcement that had exceeded consensus estimates for its fourth quarter gold production.

The energy sector pulled back for a third session, closing 0.6 per cent lower after oil prices fell overnight on demand concerns, after the latest figures showing lower manufacturing growth was lower than expected in July for the US and Europe.

Santos added 1.14 per cent to $7.08 while Woodside clocked a 0.62 per cent gain to $34.38. Origin Energy put on 0.13 per cent to $7.76 while Oil Search gained 0.71 per cent to $7.05.

Oil and gas company Karoon Energy rose by 12.4 per cent to $1.36 on its acquisition of the Baúna oilfield in the Santos Basin in Brazil for $US665 million, which is currently producing light sweet crude at a rate of approximately 20 thousand barrels of oil per day.

The Australian dollar was trading firmly lower at US69.76 cents in late trade.