The Australian share market has closed flat, held back by weakness among the major banks and expectations of a pause on interest rate cuts following the release of encouraging jobs figures.
The unemployment rate fell to 5.5 per cent in April, with the total number of people with jobs rising by 50,100, figures released by the Australian Bureau of Statistics on Thursday showed.
CMC Markets chief market strategist Michael McCarthy said there had been an “ambiguous” interpretation of the jobs data, which had led to a sell-off of some stocks.
“There are concerns that this strength in employment means that more rate cuts will be deferred for at least a few months, and that’s seen some selling particularly in those high-yielding stocks,” Mr McCarthy said.
“We have gotten into the grip of rate-cut mania, and those employment numbers provided a bit of a check on that.”
Mr McCarthy said the banking sector had also been dragged back by the ANZ Bank going ex-dividend and a fall in National Australia Bank (NAB) on the back of some concern about the quality of its earnings.
Mr McCarthy said that NAB, like some of the other major banks, was growing profitability but underlying growth in loans was weak.
NAB on Thursday reported that its half year net profit grew by 23 per cent to $2.52 billion.
NAB’s cash profit, the bank’s preferred measure of underlying performance, was up three per cent to $2.92 billion.
But NAB shares fell 69 cents, or 2.07 per cent, to $32.68.
Among the other major banks, ANZ lost 87 cents, or 2.77 per cent, to $30.59, Westpac rose 40 cents to $33.35, and Commonwealth Bank dropped 19 cents to $71.04.
In the resources sector, global miner BHP Billiton improved 24 cents to $34.54 but Rio Tinto dumped 70 cents to $58.20.
Oil and gas producer Santos found 18 cents at $12.83 as it flagged that it could return cash to shareholders through a dividend as the completion of key projects in Queensland and Papua New Guinea remain on target.
Media giant News Corp was 90 cents higher at $32.47 after its profit in the past quarter tripled to $US2.85 billion ($A2.81 billion), boosted by a one-time gain from its German satellite TV operations, and improvements in cable TV and film operations.
Oil refiner Caltex’s was up 32 cents at $21.67 after it reported that first quarter profit jumped almost 80 per cent but said refiners’ margins were likely to be squeezed as capacity in Asia and the Middle East grows.
KEY FACTS
* On Thursday, the benchmark S&P/ASX200 index was down 1.4 points, or 0.03 per cent, at 5,198.4 points.
* The broader All Ordinaries index was up 2.7 points, or 0.05 per cent, at 5,180.6 points.
* The June share price index futures contract was two points higher at 5,194 points, with 24,664 contracts traded.
* The price of gold in Sydney was $US1,469.01 per fine ounce, up $US13.37 on Wednesday’s closing price of $US1,455.64.
* National turnover was 1.64 billion securities worth $6.42 billion.