Shares shook off uninspiring overseas leads on Wednesday to rise, with gains in the banks and a rally in Premier Investments offsetting losses in energy stocks.
The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each climbed 0.5 per cent to 5651.4 points and 5703.4 points respectively.
After a meek start to the day, investors gathered courage and there was strong buying support in the consumer discretionary sector, technology stocks and the banks.
“There’s definitely an upbeat mood among investors as we see numerous positive earnings updates,” said Gary Huxtable, client adviser at Atlantic Pacific Securities.”And this has sparked investors into action, pushing our market higher and outperforming others across Asia.”
Solomon Lew’s Premier Investments provided some relief for investors burnt by recent profit downgrades in the sector. The owner of Portmans, Dotti, Peter Alexander, Jacqui E, Just Jeans, Smiggle and Jay Jays brands reported it expects first-half retail earnings to rise as much as 10.6 per cent to $93 million, sending shares 11.9 per cent higher to $14.01.
“Premier regularly gets a dark shadow cast across it by way of negative sentiment towards Australian retailers, with many investors not really understanding the company’s growth story,” Mr Huxtable said.
“The doom and gloom narratives towards Australian retail and Smiggle’s UK exposure post-Brexit were overdone, with the stock reaching a state of being oversold over the last week.”
Elsewhere in retail, shares in Specialty Fashion Group rocketed higher and closed up 26 per cent, after the company confirmed a Street Talk report that it received a $165 million take over offer from an unknown Middle Eastern financial conglomerate.
The big four banks enjoyed solid buying support, with ANZ and Commonwealth Bank of Australia closing up more than 1 per cent high, and National Australia Bank and Westpac close behind.
A 3.5 per cent jump in iron ore futures during Wednesday’s session wasn’t quite enough to boost Fortescue into the black, while resources giant BHP Billiton slipped 0.8 per cent due to a fall in oil prices. Rio Tinto, on the other hand, managed to close up 0.8 per cent just ahead of its annual result, which was posted after the market closed.
Genworth Mortgage Insurance was one of the worst performers on Wednesday, crashing 14.8 per cent after a disappointing set of full-year results. A fall in gross written premiums led to a 19.8 per cent decline in underlying net profit after tax.
Bellamy’s slipped for just the second time in 10 sessions, losing 0.2 per cent to $4.89, despite news that US hedge fund Delta Partners has increased its stake in the organic baby formula company to just above 8 per cent.