The Australian share market has closed at its highest level in more than 14 months despite enduring a flat day of trading.
At the close of trade on Wednesday, the benchmark S&P/ASX200 index was up 5.6 points, or 0.13 per cent, at 4,438.6 – it’s highest close since July 2011.
The broader All Ordinaries index also rose 6.9 points, or 0.15 per cent, to reach a five-month peak of 4,458.8.
On the ASX 24, the December share price index futures contract was one point higher at 4,435 with 24,899 contracts traded.
The ASX200 reached an intra-day high of 4,454 points in the morning session before easing back after the release of weak Australian export data which confirmed concerns about commodity prices.
The gains were a continuation of Tuesday’s trading when the market finished one per cent higher as investors piled into equities after the Reserve Bank of Australia (RBA) cut the cash rate by a quarter of a percentage point.
A cut in the interest rate tends to mean the stock market rises, as investors move money away from bonds and into equities and businesses can finance growth at a lower rate.
Investors with cash looking for a home tended to put it into high yielding components of the market, said Shaw Stockbroking senior dealer Jamie Spiteri.
“This just highlights the heavy weighting that the banks and financial sector have in our market as money looks to support the yielding components,” he told AAP.
“We’ve got other defensive stocks such as Wesfarmers and Telstra holding strongly as well.”
The four big banks gave up some gains to close mixed and are yet to announce their responses to the RBA move.
ANZ was up six cents at $25.05, CBA shed four cents to $56.00, NAB was 14 cents higher at $25.95 and Westpac was flat at $25.16.
Major resources stocks were weaker, with BHP Billiton down 11 cents to $33.43 and Rio Tinto dropping 26 cents to $53.72.
Fortescue Metals was down two cents at $3.53 and Newcrest had lost 48 cents, or 1.6 per cent, to $28.83.
In local news, the world’s largest drilling company Boart Longyear shocked the market by sacking its chief executive in an attempt to tackle its plunging share price, which is more than 30 per cent weaker in the last month.
It closed 1.5 cents stronger at $1.675.
Among defensive stocks, supermarket owner Woolworths lost 10 cents to $28.90, rival Wesfarmers put on one cent to $34.27 and telco Telstra was two cents stronger at $3.94.
National turnover was 1.45 billion securities worth $3.02 billion, with 477 stocks up, 438 down and 364 unchanged.
