Stocks end firmly higher as banks bid up

A strong bid for banks has pushed the local market to its first positive close in five sessions.

The Australian sharemarket has enjoyed its first positive session in five as a strong bid on the banks offset weakness in the resources space.

At the closing bell, the benchmark S&P/ASX 200 index bounced 19.9 points, or 0.38 per cent, to 5,227.7, while the broader All Ordinaries index advanced 16.6 points, or 0.31 per cent, to 5,326.86.

The strong showing came despite losses of over 1 per cent on Wall Street and a consequent weak open for the local bourse as soft commodity prices weighed.

Buying pressure eventually surfaced with investors eyeing opportunities out of a 7 per cent retreat from recent highs, although CMC Markets chief market analyst Ric Spooner warned the modest rally may struggle to gain traction as bond market jitters draw focus.

“The sharemarket will remain nervous while the current bond sell-off continues,” he said.

“In these circumstances, the market will be vulnerable to repeats of Tuesday’s action on Australian markets where rallies are sold. However, investors will also be conscious that the ASX 200 index is already down [almost] 7 per cent since early August.”

Financials and telcos led the way after a rough spell, with both Commonwealth Bank and Telstra rebounding sharply off yesterday’s multi-year lows.

Telstra ended up 2.6 per cent at $5.07, while CBA bounded 1 per cent to $70.16.

The best performance among the big four was recorded by Westpac, which surged 1.5 per cent to $29.12, while ANZ tacked on 0.6 per cent to $26.01 and NAB climbed 0.6 per cent to $26.40.

NAB offshoot Clydesdale Bank disappointed, diving 5.2 per cent despite upgrading its medium-term targets.

The big miners weighed heavy in response to news iron ore slid to a two-month low, with BHP Billiton giving back 1 per cent to $19.80, Rio Tinto losing 1.3 per cent to $46.83 and Fortescue skidding 1.7 per cent to $4.66.

The energy sector lagged more significantly, with overall losses of around 1.5 per cent as against 0.6 for the materials subindex.

Santos plunged 5.7 per cent to a fresh six-month low of $3.51, Origin stumbled 2.2 per cent to $4.97 and Woodside eased 0.7 per cent to $27.37.

In retail, Coles owner Wesfarmers gained 1.2 per cent, Woolworths added 0.4 per cent and Myer jumped 2 per cent ahead of its full year results release of Thursday.

Elsewhere, fund manager Platinum Asset Management rocketed 9.6 per cent after an on-market buyback plan caught shorters off-guard, while national carrier Qantas rose 0.3 per cent to $3.30 as it was seen as a beneficiary of slumping oil prices.

The Australian dollar rallied US0.4c through the local session to US74.85c as investors took on more risk.