Australian stocks made gains for a sixth consecutive day as investors reacted to this week’s interest rate cut by taking money out of bonds and into equities.
At the close of trade on Thursday, the benchmark S&P/ASX200 index was up 13.8 points, or 0.31 per cent, at 4,452.4, while the broader All Ordinaries index had risen 13.8 points, or 0.31 per cent, to 4,472.6.
On the ASX 24, the December share price index futures contract was 25 points higher at 4,460 with 23,103 contracts traded.
The strong gains made in financials stocks were offset by a weak performance in resources stocks, which are dependent on global growth to post strong earnings.
Shaw Stockbroking senior dealer Jamie Spiteri said that had been the theme all week, reinforced by the Reserve Bank cutting the Reserve Bank of Austraia’s (RBA) cash rate by 25 basis points on Tuesday to a three-year low of 3.25 per cent.
“There is a thought building that asset allocation is looking for improved levels of return and cash products going to be delivering lower flatter income over short term,” he told AAP.
“Banks offer the most attractive and reliable dividend yields and that has been something that has maintained an influence today.
“The risk associated with the resources sector doesn’t quite have appeal at present, due to the uncertainty associated with the recovery in the US, Europe struggling to re-establish stability and uncertainty with commodity prices because of moderating growth in Asia.”
BHP Billiton dropped 44 cents to $32.99, Rio Tinto was up 23 cents to $53.95 and Fortescue lost eight cents, or 2.3 per cent, to $3.45.
The major banks were all higher.
ANZ was up 25 cents to $25.30, after announcing plans to spend up to $1.5 billion on new mobile banking apps and upgrades of its branches in a bid to attract more customers.
Commonwealth Bank was 55 cents higher at $56.55, National Australia Bank gained 20 cents to $26.15 and Westpac was up 41 cents to $25.57.
Other financial stocks were also stronger, with QBE Insurance up 2.12 per cent, or 28 cents, to $13.49.
In other news, oil and gas explorer Drillsearch Energy has made a $118 million takeover offer for fellow explorer Acer Energy.
Acer closed up nearly 36 per cent at 26.5 cents, while Drillsearch gave up three cents to close at $1.55.
In economic news, Australian retail spending rose a weaker than expected 0.2 per cent in August, and residential building approvals rose a better than expected 6.4 per cent to 12,046 units in July.
Retailers were mixed, with David Jones down one cent at $2.50, Harvey Norman lost 1.5 cents to $1.965, and Myer was up two cents to $1.80.
National turnover was 2.23 billion securities worth $3.88 billion, with 494 securities up, 412 down and 387 unchanged.
