Australian stocks have enjoyed a steady rebound from yesterday’s losses as higher oil and base metal prices boosted the resources space.
At the close today, the benchmark S & P/ASX 200 index bounced 19.6 points, or 0.33 per cent, to 5,876.2, while the broader All Ordinaries index lifted 20.1 points, or 0.34 per cent, to 5,915.9.
The gains were broadly in line with those seen on the open, but they masked another choppy day as the benchmark index briefly fell into the red through early afternoon deals.
Australia’s big banks served as the drivers of the temporary slide as investors shied away with regulators ramping up the pressure on home lending.
“The overall character of market this week has been one of cautious, sideways drift,” CMC Markets chief market analyst Ric Spooner said.
Traders are awaiting several key events later in the week that could shape the near-term direction of global bourses — headlined by US jobs data, although it is reporting season in the US later this month that looms largest.
Closer to home, weak retail figures on Monday have hurt sentiment.
“We saw some soft retail sales this week and that’s not giving investors any reason to cheer,” Gary Huxtable, client adviser at Atlantic Pacific Securities, said.
“At the same time stocks with exposure to the US markets have taken a breather as we approach Friday’s non-farm payrolls data.”
Mr Huxtable added “indecision” ruled for the time being as a tug of war between sectors plays out, with resources taking a heavy burden as regulatory crackdowns put a cap on bank stocks.
“So far, (resources companies) have delivered on the back of cyclone Debbie boosting coal prices, and a stabilisation in the iron ore market,” he said.
In materials, BHP Billiton jumped 3.5 per cent to $24.75, while Fortescue shot up 5.2 per cent to $6.42 and Rio Tinto surged 3 per cent to $61.72.
In energy, Santos bounded 2.7 per cent to $3.80, while Woodside won 1.6 per cent to $32.78.
“The oil market (has) built on recent gains,” CMC Markets’ Mr Spooner said.
“However, the recent strength in the oil price does potentially increase its sensitivity to this week’s US inventory data, with a good result likely to be required to maintain momentum.”
The big banks were mixed as APRA boss Wayne Byres hinted more stringent home lending regulation could be forthcoming.
NAB backtracked 0.7 per cent, Westpac lost 0.6 per cent and ANZ slid 0.5 per cent, while CBA bucked the trend to inch up 0.1 per cent.
Among other blue chips, telco giant Telstra slipped 0.9 per cent to $4.63, while national carrier Qantas climbed 0.5 per cent to $3.94.
Elsewhere, insurer IAG eased 0.3 per cent to $5.95 on the back of a warning on margins in the wake of Tropical Cyclone Debbie.
Meanwhile, the Australian dollar ended local trade around US75.75c, gaining US0.1c through the day on strength in commodities. However, it is seen likely to remain under pressure in the lead-up to the next labour force report.
“The Australian dollar was pushed lower yesterday by the RBA statement which acknowledged that labour market conditions have softened recently,” Mr Spooner said.
“This means that the currency is likely to be very sensitive to employment data over coming months. The next monthly release will be on April 13.”