The Australian share market has closed higher despite a poor start as investors found reason to buy into the major banks.
The local bourse opened sharply lower after a bomb threat in Germany rattled investors and prompted a market reversal on Wall Street.
But the Australian market lifted in afternoon trading.
“It’s a stunning turnaround today. Pretty much everything has turned the corner except for the materials space, which is still deep in negative territory on the performance of commodities prices last night,” optionsXpress market analyst Ben Le Brun said.
Mr Le Brun said Commonwealth Bank was the linchpin.
“With CBA and some of those banks, investors may be starting to think that they’ve hit the hammer a bit too hard on the sell side in recent times,” he said.
Mr Le Brun said remarks from Commonwealth Bank at its annual general meeting on Tuesday that it was comfortable with its capital requirements and would not have to raise more capital had put investors’ minds at ease.
Among the major banks, Commonwealth Bank was 77 cents higher at $77.84, National Australia Bank lifted 29 cents to $28.79, ANZ firmed 26 cents to $26.75, and Westpac put on 17 cents at $30.77.
In the resources sector, falls in oil, iron ore and copper prices put downward pressure on stocks.
Global miner BHP Billiton descended below $20 again, losing 56 cents to $19.81, Rio Tinto dumped $1.30 to $46.80, and Fortescue Metals dropped seven cents to $2.15.
Explosives maker Orica climbed 36 cents to $15.97. Orica has flagged improving earnings for this financial year after posting a $1.267 billion full year loss due to a huge asset writedown.
Airline Virgin Australia advanced half a cent to 44.5 cents, saying it is on track to return to profit and has unveiled plans to increase capacity on its trans-Tasman routes.
KEY FACTS
* The benchmark S&P/ASX200 index was up 14.9 points, or 0.29 per cent, to at 5,133.1 points, according to preliminary closing figures.
* The broader All Ordinaries index was up 14.8 points, or 0.29 per cent, at 5,189.1 points.
* The December share price index futures contract was up seven points at 5,131 points, with 27,433 contracts traded.
* National turnover was 1.56 billion securities worth $4.24 billion.
