The Australian sharemarket is barely holding on to gains in early trade after National Australia Bank results dampen investor sentiment despite overnight gains on Wall Street.
The benchmark S&P/ASX200 stock index was up 0.1 per cent after the first half-hour of trade on Thursday, with weakness in financials offsetting gains in the energy and materials sectors.
The positive start was a surprise because of the investor reaction to the banking major’s results, Australian Stock Report’s head of trading Chris Conway said.
“NAB shares are lower and generally that would be a drag on the entire market given the financial sector’s weightage,” he said.
The gains may not be enough, though, to push the benchmark index over the psychological barrier of 6000 points in today’s session, he added.
Overnight, US markets posted modest gains after the Federal Reserve kept interest rates unchanged and gave encouraging comments about the economy.
The US central bank pointed to solid US economic growth and a strengthening labour market while downplaying the impact of recent hurricanes, a sign it is on track to lift borrowing costs again in December.
The Dow Jones Industrial Average rose 0.25 per cent, while the S&P 500 gained 0.16 per cent.
Locally, mining shares lifted, including majors such as BHP Billiton and Rio Tinto which each rose more than two per cent after an overnight bounce in iron ore prices.
Energy stocks, including Woodside, Origin and Oil Search, also rebounded, by more than one per cent, after oil prices hit their highest level in more than two years, before retreating.
Meanwhile, the Australian dollar remains below US77¢ against a strengthened greenback following the US economic data and the Federal Reserve’s decision to keep its interest rates on hold.
The local currency was trading at US76.76¢ at 1030 AEDT on Thursday, from US76.62¢ on Wednesday.