Stocks flat amid energy softness
The local market recouped early losses in afternoon trade as buying interest returned.
The Australian sharemarket ended a quiet Wednesday session flat, as strength in energy stocks offset weakness in the big miners.
At the closing bell, the benchmark S&P/ASX 200 index inched down 1 point, or 0.02 per cent, to 5,370, while the broader All Ordinaries index eked out a gain of 0.1 points to 5,441.1.
Investors had pushed the benchmark index down over 0.5 per cent in early trade, before buying interest returned in the afternoon.
CMC Markets chief market analyst Ric Spooner said the prospect of persistently low rates gave investors no reason to shift out of stocks despite a recent run-up in valuations.
“Investors are not seeing the need to rotate out of equities,” he said.
“The consensus outlook remains for continued low interest rates and moderate profit growth. It may not be exciting but neither are the alternatives.”
IG chief market strategist Chris Weston agreed investors were seeing little downside in the current environment, although the local market has consistently struggled to top resistance around the 5,400-point mark.
“Both the ASX 200 and importantly SPI futures (June) seem so comfortable in this 5,300 to 5,400 range it’s been in since May 10 and should continue to be traded as such,” he said.
Energy stocks led the way after a strong gain in crude prices, with Santos surging 2.6 per cent to $4.74, Oil Search advancing 2.5 per cent to $6.98, Origin bounding 3.5 per cent to $5.95 and Woodside lifting 1 per cent to $27.72.
Oil prices jumped 1.8 per cent to $US51.44 on Wednesday morning.
Unlike recent sessions the gains in energy didn’t extend to the materials space as a broad slide in base metal prices – outside iron ore – forced selling pressure for the first day in four.
BHP Billiton dipped 1.2 per cent to $19.54, Rio Tinto lost 1.9 per cent to $45.17 and Fortescue slumped 4 per cent to $3.16.
The banks ended mixed as investors weighed talk of a royal commission and legal action from ASIC over rate-rigging allegations.
ANZ edged down 0.52 per cent to $24.73, Commonwealth Bank eased 0.45 per cent to $76.99 and NAB gave back 0.45 per cent to $26.47, while Westpac bucked the trend in rising 0.29 per cent to $30.60.
Among blue chips, Telstra slid 1.1 per cent to $5.51, while Qantas leapt 3.8 per cent to $3.04.
Elsewhere, Estia Health continued its recent trend lower, tumbling 4.8 per cent to $4.91 as short sellers took a stance against the aged care operator’s growth prospects.
Meanwhile, the Australian dollar was trading around a one-month high of US74.5c as investors eyed mixed housing finance data against news iron ore imports into China rose sharply in May.