Stocks book best close for 2016

The local market’s sixth straight session in the black has lifted it to a new closing high for the year.

The Australian sharemarket has set a new closing high for 2016 as the big banks continued their strong rally.

At the closing bell, the benchmark S&P/ASX 200 index lifted 23.1 points, or 0.43 per cent, to 5,411.6, while the broader All Ordinaries index added 21.5 points, or 0.39 per cent, to 5,491.8.

The positive session served as the sixth straight for the benchmark index and a strong finish to the day brought the highest close for the year, just edging out the previous peak set on May 30.

The market remains 21 per cent shy of the all-time high set in 2007.

The run of positive days equals the best streak for the year, previously set in March, which has some analysts warning of an imminent pullback.

“The balance of probability … suggests buying on the sixth day of gains is probably not the best strategy (from a risk reward perspective) and one should perhaps wait for a slight pullback, although in December the market did rally for nine consecutive days,” IG chief market strategist Chris Weston said.

Driving the solid gains on Thursday were the telecommunications, healthcare and financial sectors, with gains of between 0.8 and 1.2 per cent recorded.

There was plenty of green ink elsewhere, with the energy and materials the only two (of 10) sub-indexes to record red numbers.

The big banks all surged around 1 per cent despite Moody’s warning they had become more vulnerable to economic shocks.

ANZ jumped 1 per cent to $24.75, while Commonwealth Bank climbed 0.96 per cent to $75.61 and Westpac gained 0.95 per cent to $29.80. NAB outperformed by driving 1.3 per cent higher to $25.67.

Weakness in commodity prices weighed on the broad resources sector, with BHP Billiton dipping 1.2 per cent to $20.34 and Rio Tinto slid 1.1 per cent to $50.20.

Iron ore miner Fortescue Metals stumbled 4.1 per cent from a two-year high to trade at $4.22.

In energy, Santos gave back 1 per cent to $4.75 and Woodside lost 1.1 per cent to $26.75, with weak crude prices the key to the retreat. Investors also analysed Woodside’s foray into Senegal as the WA-based giant chases new growth opportunities.

The materials subsection fell 1.3 per cent overall, while the energy index was off 0.6 per cent.

Contrasting against the falls in the resources space was a strong showing from BlueScope Steel, which rocketed 7.2 per cent to $7.85 after sharply upgrading its second-half profit forecast.

Meanwhile, Telstra added 1.2 per cent to $5.75 as part of a broad rally in telco stocks, while Qantas edged up 1 per cent to $3.02.

The Australian dollar ended the local session at US76.28c, holding onto gains seen upon the release of mixed jobs data.

The labour market numbers for June showed a lower-than-expected rise in jobs, although a strong increase in full-time numbers offered a rosier view.