Banks, miners propel Australian bourse
Stronger bank and mining stocks saw Australian shares post surprising gains on Monday ahead of Tuesday's interest rate decision and a crucial mid-week meeting of the US Federal Reserve. The benchmark S&P/ASX200 index was up 36.9 points, or 0.79 per cent, at 4698.5, while the broader All Ordinaries index had gained 37.6 points, or 0.79 per cent, to 4771 points. On the ASX24, the December share price index futures contract was up 50 points at 4697, with 23,015 contracts traded. With a flat lead from Wall Street and volumes low ahead of Tuesday's Melbourne Cup, brokers were surprised by Monday's gains.
The big four banks led the way after the sector was buoyed by stronger than expected financial results last week. ANZ gained nine cents to $24.90, Commonwealth Bank lifted 41 cents to $49.31, National Australia Bank added 43 cents to $25.89 and Westpac, which will be the last to report annual results on Wednesday, was 35 cents higher at $23.05.
The big miners were also higher, with Rio Tinto up 30 cents to $82.99 and BHP Billiton 38 cents higher at $42.30. Gold miner Newcrest was also a top performer, up 41 cents to $40.37, as the falling US dollar pushed the gold price higher. The spot price of gold in Sydney was $1,362.50 per fine ounce, up $22.00 from Friday's local close of $1,340.50.
Among the weakest stocks in the top 20 was constructor Leighton, which dropped 40 cents to $36.30, as Spanish constructor ACS said it was willing to guarantee in writing Leighton's independence as part of a takeover of the contractor's German parent Hochtief. Healthcare stock Resmed lost 14 cents, or 4.11 per cent, to $3.27 after a broker downgraded its sales forecasts.
Coles owner Wesfarmers lost six cents to $33.08, Woolworths shed 16 cents to $28.19, Harvey Norman fell by one cent to $3.32 and JB Hi Fi was three cents lower at $19.85. Retailers will be among many watching the result of the Reserve Bank of Australia's November meeting, with market consensus forecasting a 25 per cent chance of a rate rise.
In other news, Ten Network has offered James Packer and Lachlan Murdoch directorships, following reports that Mr Murdoch is in talks to buy half of Mr Packer's new stake in the television broadcaster. Ten shares added two cents to $1.46. The top traded stock by volume was miner Metals X, with 64.6 million shares worth $16.8 million changing hands. Metals X shares added one cent, or 3.51 per cent, to 29.5 cents. Preliminary national turnover was 2.24 billion shares worth $3.96 billion, with 641 stocks up, 484 down and 373 unchanged.
The Australian dollar gained in Asia trade Monday, while bonds fell broadly in the day before the Reserve Bank of Australia's November policy meeting. Ahead of central bank meetings in both Australia and the U.S. this week, the Australian dollar is particularly vulnerable to volatile trading, especially as it remains near its post float highs. The Australian dollar rallied for nine straight weeks starting in September partly on the back of growing interest rate hike expectations, as well as a broad drop in the U.S. dollar but has remained in a tight range in recent trading.
The G-20 meeting is on Nov. 11-12, with currency valuation disagreements between Asia and other developed nations expected to take center stage. The Australian dollar traded at $0.9887, up from $0.9760 late Friday. Against the Japanese yen, the currency traded at 79.63, up from 78.72.