Stocks rally to fresh peak

The local sharemarket has extended gains in late trade, defying resources weakness.

The Australian sharemarket has rallied into the close, extending on its strong recent run despite a sell-off in the resources space.

At the closing bell, the benchmark S&P/ASX 200 index added 37.4 points, or 0.69 per cent, to 5,488.7, while the broader All Ordinaries index rose 32 points, or 0.58 per cent, to 5,565.9.

The numbers represent a new 11-month peak for the benchmark, which has now risen for nine of the last 10 sessions.

The market saw broad-based buying, with the materials and energy sectors the laggards after commodity prices fell and BHP delivered a mixed full-year production report.

The materials subsector was the only one to end in the red as it weakened 1.4 per cent, while energy inched up less than 0.1 per cent.

“BHP’s production result has not been good enough to turn around the negative sentiment towards the materials sector in evidence yesterday,” CMC Markets chief market analyst Ric Spooner said.

Mr Spooner added the broader gains were helped by yesterday’s RBA board meeting minutes, which raised hopes for a rate cut next month that could benefit a number of sectors of the market, including retail and utilities.

“Yesterday’s RBA statement focussed market attention more directly on its August meeting by specifically mentioning its assessment of data on inflation and the economy due to be received prior to that meeting,” he said.

“This has helped provide support for some sectors of the stock market via a weaker currency and lower bond yields.”

Major retail names were near the head of the leaders’ list for a third day, with Woolworths jumping 1.4 per cent to $22.52, Wesfarmers climbing 1.4 per cent to $41.91 and Myer advancing 1.2 per cent to $1.245.

In contrast, BHP skidded 2.9 per cent to $19.25 after its production report failed to flatter, while Rio Tinto slid 2 per cent to $48.00 and iron ore miner Fortescue weakened 1.5 per cent to $4.00.

The financial sector tacked on around 1 per cent, with Westpac’s 1.2 per cent gain pacing the big banks. NAB underperformed by advancing 0.6 per cent at the close.

The energy sector clawed into the black at the end of the session despite weaker crude prices and a soft start to the day.

Woodside gained 0.51 per cent to $27.34, while Santos edged down 0.41 per cent to $4.86 and Oil Search lost 0.27 per cent to $7.33.

The biggest fall in the ASX200 was reserved for engineering giant Cimic, however, which delivered a weak earnings report to the market after the close of trade on Tuesday.

Its shares tumbled as much as 20 per cent on the news, before settling down 19 per cent at $26.96.

Meanwhile, Telstra advanced 0.87 per cent to $5.83, while Qantas rose 1.6 per cent to $3.13.

The Australian dollar ended the local session at US75.05c, after slumping to a two-week low under US75c during offshore trade.