Stocks book best day in 2 weeks

Blue chip telco and bank stocks have led the bourse higher, while individual companies swung on earnings results.

The Australian sharemarket has enjoyed its best day in two weeks as blue chip stocks in the telecommunications and banking sectors drew favour.

At the closing bell, the benchmark S&P/ASX 200 index jumped 38.7 points, or 0.7 per cent, to 5,553.8, while the broader All Ordinaries index advanced 34.8 points, or 0.62 per cent, to 5,647.1.

CMC Markets chief market strategist Michael McCarthy said the local bourse was going through a consolidation phase, but the lacklustre activity on the surface belied some significant individual moves.

“After the battering of markets in the first half of the year there is an eerie calm blanketing stock indices globally. Despite elevated risks, and valuations, volatility is near historic lows,” he said.

“Looks can also deceive. While the Australia 200 index is trapped in a 60 point range, below the surface there are strong swings as individual companies report.

“The action is not confined to the announcement day, with Treasury Wine estates extending its surge this week, just as Medibank Private continues to tumble.”

The latter stemmed the bleeding in Tuesday trade by closing flat, but Treasury kept on pushing to new heights, rising 1.5 per cent on the day and 17 per cent since its Thursday results.

Earnings season continued with a flurry of results, ahead of a tailing off seen from Friday.

The telco sector drew some of the spotlight after Vocus delivered a record profit, with its shares lifting 2.8 per cent in response.

The news helped the industry as behemoth Telstra tacked on 0.73 per cent and TPG added 1.5 per cent.

In retail, Kogan closed steady despite comfortably outstripping its prospectus forecasts, while Coles owner Wesfarmers lifted 0.8 per cent ahead of its full-year results on Wednesday and Rivers owner Specialty Fashion nosedived 18 per cent after narrowing its full-year loss.

The most spectacular moves were reserved for the mining services industry, however, as Monadelphous plunged 18 per cent after it fell short of expectations and Bradken eased 1.8 per cent despite reporting a stabilisation in market conditions.

Worley Parsons copped the backwash, sliding 5.6 per cent ahead of its results on Wednesday.

Earnings season also drew plenty of attention in the energy sector as Oil Search slid 0.8 per cent despite meeting market expectations for the half year, Caltex stumbled 1.6 per cent as a lift in profit was offset by news of a dip in revenues and Senex lost 1.9 per cent after reporting another loss.

Other big names in the sector failed to flatter after crude prices dipped 3 per cent in offshore deals, with Santos ending flat and Woodside weakening 0.4 per cent.

Woodside also captured attention as it was revealed its $US430 million Senegal oil buy may face a rival bid from the ASX-listed FAR Ltd.

Elsewhere, shopping centre owner Scentre inched down 0.2 per cent as Moody’s warned on its debt rating after it logged a 6.6 per cent rise in profit, Prime Media pared gains to end up 1.8 per cent as investors eyed better-than-expected underlying earnings and Healthscope gained 1.7 per cent after beating earnings expectations.

The biggest swing in a day of wild individual moves came from software group Aconex, which closed up 1.6 per cent as investors warmed to its outlook after initially sending it down 12 per cent on the release of its full-year report.

In finance, the big banks closed around one per cent higher, making the financial sector one of the best performers of the day. Westpac outperformed with a 1.5 per cent gain.

Meanwhile, the Australian dollar pushed clear of US76c, ending the local session at US76.4c.