Late bank run sends stocks into positive territory

After trading in the red for much of the day as telcos dived, the banks helped drive the index to a positive close.

ASX computer screens at Exchange Centre on Bridge Street, Sydney working on Monday afternoon.

The Australian sharemarket has eked out a higher close as strength in the materials space offset a heavy sell-off in telecommunications, after TPG Telecom stunned analysts with guidance that came in well shy of expectations.

At the closing bell, the benchmark S&P/ASX 200 index added 8.8 points, or 0.17 per cent, to 5,303.6, while the broader All Ordinaries index inched up 3.6 points, or 0.07 per cent, to 5,397.3.

Ric Spooner, chief market analyst at CMC Markets, said investors were largely unwilling to make heavy bets on the direction of markets ahead of crucial policy updates from the Bank of Japan and US Federal Reserve this week.

“Markets appear to have arrived at a level that reflects the consensus view of the balance between risk and reward leading into this week’s central bank meetings,” he said.

“Current levels represent a compromise position with movement in either direction likely if central banks are deemed to be either more hawkish or more dovish than currently expected.”

Markets traded in the red for much of the session, but a shift in sentiment on the banks drove a higher close after the big miners had earlier led the way.

Traders were, however, mostly cautious in the first full day of trading this week after a technical glitch brought the market to a halt for the majority of Monday’s session.

TPG Telecom plunged 21.4 per cent to $9.28, with its heaviest fall on record wiping out all of its gains for the year.

The fall represented a brutal reaction to a fiscal 2017 forecast that came in well short of market expectations.

TPG’s troubles weighed on the sector, with Telstra sliding 1.2 per cent and Vocus Communications slumping 3.6 per cent.

The action contrasted against the bullishness around materials after base metal prices largely moved higher in offshore trade.

BHP Billiton jumped 2.5 per cent to $20.61, Rio Tinto advanced 1.5 per cent to $47.25 and iron ore miner Fortescue climbed 1.4 per cent to $4.96.

Energy stocks faced pressure as investors worried the latest rally in crude prices would not be sustained.

Santos dipped 1.1 per cent to $3.53, Origin Energy skidded 3.1 per cent to $4.75 and Woodside lost 1.2 per cent to $26.79.

In finance, the big four banks ended around 0.5 per cent higher after a lacklustre open, with NAB the exception in only gaining 0.1 per cent.

In retail, Coles owner Wesfarmers rose 0.8 per cent, Woolworths bounded 1.3 per cent and Myer lost 1.6 per cent.

Meanwhile, the Australian dollar ended the local session steady around US75.45c, with the release of minutes of the RBA’s latest board meeting having little effect on the currency’s valuation.