Australia: Market ends higher

Australian share market closed slight higher on Thursday, 26 May 2016, on the back of strength in energy and material stocks thanks to strength in crude oil and base metal prices. At close of trade, the benchmark S&P/ASX 200 index inclined 15.60 points, or 0.29%, to 5388.10. The broader All Ordinaries added 15.10 points, or 0.28%, to 5451.90. Rising stocks outnumbered declining ones on the Australia Stock Exchange by 554 to 432 and 316 ended unchanged. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was down 0.01% to 16.857 a new 1-month low.

The best performers of the session on the S&P/ASX 200 were Programmed Maintenance Services, which rose 17.7% to A$1.90. Meanwhile, Whitehaven Coal added 9.7% to A$0.823 and Iluka Resources was up 7% to A$6.390. The worst performers of the session were Spotless, which fell 9.5% to A$1.05. Suncorp Group declined 4.3% to A$12.62 and Ardent Leisure Group was down 3.7% to A$2.235.

 

Shares of energy players reaped the gains from the rising crude oil prices, with Oil Search up 0.1% to A$6.71, Santos up 4.9% to A$4.49 and Woodside up 2% to A$27.71. Poker machine maker Aristocrat Leisure rose 0.1% to A$12.45 after boosting its net profit for the first half of 2016 by 66% to $A183.2 million due to strong growth in Australia and North America and more punters using its social gaming apps.

Materials and resources stocks also rallied. Global miner BHP Billiton advanced 2.7% to A$19.41 and Rio Tinto jumped 1% to A$45.48. Pure-play iron ore producer Fortescue Metals added 2.1% to A$2.96.

Shares of banks and financial companies all added weight, with Commonwealth Bank up 0.3% to A$78.59, ANZ Banking Group up 1% to A$25.54, and Westpac Banking Corp up 1% to A$30.75, while National Australia Bank fell 0.4% to A$27.36.

Consumer staples were the major drag on the market, with Wesfarmers declining 3.6% to A$40.40 in the wake of Wednesday's A$2.3 billion Target write-down and after a analysts at Deutsche Bank said they now expected a 10% cut in the company's dividend this financial year, from A$2 to A$1.80. Citi also tipped a dividend cut, but by a much lower 3 cents to A$1.97, while Macquarie predicts a reduction to $1.92. Wesfarmers' main competitor, Woolworths, also had a poor day, losing 1.2% to A$22.01.

Gaming machine company Aristocrat was steady at A$12.45, up just 0.16%, despite more than doubling half year profit to A$159.1 million.

On the currency front- The Australian currency (AUD) tread water against the US dollar and basket of other major currencies. Around late afternoon, the Australian dollar was last traded at 0.7214 against US dollar, 0.6459 against the euro, 79.4261 against the Japanese yen, 0.4906 against the British pound, 0.7156 against Swiss franc, 0.9337 against Canadian dollar, and 5.56023 against the HK dollar.

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