Local stocks buck Asian falls as Wesfarmers leaps on Coles demerger plan

The local bourse has closed solidly higher as Wesfarmers jumped more than 6pc on its plans to demerge Coles.

A pedestrian is reflected in the window of the Australian Securities Exchange (ASX) showing stocks gains during opening trading in Sydney. (AFP PHOTO/PETER PARKS)

The local sharemarket booked solid gains as a big jump in Wesfarmers’ share price helped drive the bourse higher, but financials weighed on the market.

At the close of trade, the benchmark S&P/ASX200 had ticked up 28.545 points, or 0.48 per cent, to 5,949.4 points, while the broader All Ordinaries index lifted 28.15 points, or 0.47 per cent, to 6,055.8 points.

CommSec market analyst Steven Daghlian said the session’s gain was due to a handful of stocks which kept the market positive.

“The market has been hovering around 6,000 points and we might need a push like some good news or a fresh catalyst to see it continue to track higher,” he said.

“I think the fact that there’s been a number of changes and political uncertainty in the US is keeping markets on edge a bit.

“We’ve had tariffs out of the US, President Trump switching out his top economic adviser and his secretary of state as well and worries of a potential trade war — these are all things that are probably holding back the market from pushing through 6,000 points.

“At the moment we seem to be at the mercy of what’s happening offshore rather than any fundamental changes here locally.”

The big four banks continued to weigh on the market.

NAB slid 0.54 per cent to $29.51, while ANZ edged down 0.07 per cent to $28.03. Commonwealth Bank dropped 0.58 per cent to $75.34, while Westpac weakened 0.54 per cent to $29.52.

The major miners rose on the back of strength in the iron ore price, which inched higher on Thursday night on the news that China will implement new curbs on production until November.

BHP gained 1.04 per cent to $29.16, while Rio Tinto added 0.74 per cent to $76.62. Fortescue was unchanged at $4.78.

South32 jumped 5.63 per cent to $3.38 after the company was upgraded to neutral from underperform by Credit Suisse.

Wesfarmers shot up 6.31 per cent to $43.80 after it announced plans to demerge its Coles grocery division to create a new top 30 company on the ASX. Woolworths put on 1.25 per cent to $26.78.

Premier Investments soared 6.12 per cent higher to $15.27 after it booked a record first half net profit, driven by strong sales growth in its Peter Alexander and Smiggle stores as well as improved online sales.

The energy sector was mixed after the price of crude increased.

“Crude oil prices were slightly higher, supported by comments from IEA that the market remained tight,” said ANZ Australian economics head David Plank.

“The Paris-based intergovernmental organisation warned that an impending shortfall of global oil, driven by the dire situation in Venezuela’s oil sector. This is despite its forecast for US output to continue to surge higher.”

Oil Search lowered 0.24 per cent to $28.56, while Woodside Petroleum dropped 0.24 per cent to $28.56. Origin Energy swelled 2.08 per cent to $8.84, while Santos was unchanged at $4.89

The Australian dollar was trading slightly lower at US77.92 cents in late trade.