Record As Banks Beat Oil Slip
The Age
Saturday November 4, 2006
STRONGER than expected earnings from National Australia Bank helped lift the market to another record high as a further fall in oil prices triggered a decline in commodity stocks.
The S&P/ASX 200 Index closed up 22.6 points at 5432.The benchmark broke its own previous closing highs three times this week. Since October 1, it has climbed 4.9 per cent from 5178 points - making it the best month for sharemarket returns in five years.Shares in NAB soared $1.40 to $39.60 - their biggest one-day rise in more than three years. NAB reported a full-year profit of about $4.4 billion, beating analyst and investor forecasts.This helped buoy the banking sector. Westpac rose 13? to $23.93 and St George lifted 48? to $33.08. Both reported strong earnings earlier in the week.Commonwealth Bank put on 44? to $48.25 and ANZ closed up 13? at $29.72.Music and lingerie retailer Brazin jumped 41?, or 30 per cent, to $1.76 after founder Brett Blundy, who has a 62.5 per cent stake, launched a $1.81-a-share bid to buy out minority investors.Telstra rallied 7? to $3.95 after two days of losses.Zinifex continued its strong surge of recent weeks, gaining 43? to $15.88. Challenger International's monthly market review noted that the stock climbed 35 per cent from $12 during October."October was dominated by merger and acquisition activity with several deals announced, most notably Mexican company Cemex's bid for building materials producer Rinker Group," said the monthly report.The report highlighted the materials sector as the best-performing sector, returning 9.48 per cent. The resource sector rose 7.05 per cent, consumer discretionary 6.6 per cent and telcos 6.75 per cent.An overnight US83?-a-barrel fall in the spot price of crude oil to $US57.88 sent BHP Billiton down in early trading. After further swings it closed down 15? at $27.45. Woodside slid 30? to $36.65.AMP chief economist Shane Oliver said oil prices might rebound slightly but it should stabilise in a range from $US55 to $US60 a barrel early next year."US economic indicators remain consistent with slowing growth," Dr Oliver said. "While the Fed may express concern about slowing productivity, our assessment remains that slowing growth will lead to slowing inflation and by early next year US interest rates will be falling. While the Australian sharemarket is likely to take a short breather as investors digest recent strong gains, it is likely to push on to 5500 by year end."The dollar had its fourth weekly gain, its longest winning streak since May. In the past week, it has jumped from US76.34? to close at US77.45? as gold reached a seven-week high and copper continued to climb.ONLINE? For a free share portfolio tracker and news alerts, go to tradingroom.com.au
© 2006 The Age