The Australian share market has closed at levels not seen in almost five years as a weakening domestic currency boosted the big miners.
But banking stocks finished in negative territory, despite the S&P/ASX 200 index closing at the highest point since June 2008.
A fall in the Australian dollar to an 11-month low of 100.47 US cents early on Friday helped BHP Billiton close 0.61 per cent, or 21 cents firmer, at $34.75 as Rio Tinto gained 0.43 per cent, or 25 cents, to $58.45.
CMC Markets chief market analyst Ric Spooner said the weakening Australian dollar helped the multi-national mining companies, whose profits and revenue are nominated in US dollars.
The big banks, however, finished in the red after the Reserve Bank of Australia expressed optimism about the health of Australia’s major trading partners and domestic consumption.
“Growth of Australia’s major trading partners is expected to continue to exceed that of the world, reflecting the faster growth of Australia’s trading partners in Asia,” the central bank said in its monthly monetary policy statement.
Mr Spooner said the RBA’s statement hurt the banks, as investors interpreted it as a sign that interest rates would not be cut further.
“They have people thinking that we’re not as likely to see more rate cuts in the near future as they may have thought a couple of days ago,” he told AAP.
“That’s a bit of a negative for some of these high-yield stocks, and banks generally because they benefit from a falling rate environment.”
ANZ led the banks lower, losing 1.5 per cent, or 46 cents, to end at $30.13.
Westpac also finished worse off, relinquishing 1.2 per cent, or 40 cents, to $32.95 while the Commonwealth Bank lost 0.66 per cent, or 47 cents, to end at $70.57 as National Australia Bank shed 0.64 per cent, or 21 cents, to hit $32.47.
KEY FACTS
* On Friday, the benchmark S&P/ASX200 index was up 7.7 points, or 0.15 per cent, at 5,206.1 points.
* The broader All Ordinaries index was up 10.5 points, or 0.2 per cent, at 5,191.1 points.
* At 1620 AEST, the June share price index futures contract was six points higher at 5,200 points, with 22,738 contracts traded.
* National turnover was 1.827 billion securities worth $4.45 billion.
