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Aust shares cling to positive territory

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The Australian share market has ended slightly higher, buoyed by mining stocks, while the poor showing for the ruling Conservative Party in the UK election has given the Aussie dollar a boost against the pound sterling.

At 1630 AEST the benchmark S&P/ASX200 was near-flat at 5,677.8 points, up 0.02 per cent after a tumultuous 24 hours of international events featuring sacked FBI director James Comey’s testimony to Congress and a disastrous result for UK PM Theresa May, with her Conservatives now facing minority government.

IG Markets analyst Chris Weston said Australia’s market remained well insulated from a morning of global drama.

“Exit polls from the UK election caused a bit of angst in morning markets but in the end, and without a smoking gun from former FBI director James Comey, in the end everyone said… whatever,” Mr Weston said.

Predictable central bank policies in the US, Europe and Asia are ensuring market rationale prevails, Mr Weston said.

“Next week the (US Federal Reserve) will raise rates, and markets realise that,” he said.

While the Australian sharemarket is down 1.8 per cent for the week, Mr Weston noted equity markets elsewhere were largely calm.

On the local front, Australian mining stocks revived a subdued day of trade, keeping the market in positive territory in the face of a further plunge in energy stocks and another dip for the banking sector.

“Materials might be getting some love and there does seem to be a move into mining coinciding with a move away from energy,” Mr Weston said.

Ambivalence continues to stymie Australian financials, as macro-prudential commitments and housing concerns weigh on investors.

“Financials are pretty scatty,” Mr Weston said.

“The banking sector has been hit pretty hard. Earnings have peaked and Australian banks are in a bit of a bad news cycle.”

NAB was the worst performer among the major banks, down 0.81 per cent to $29.40.

In other companies news, Woodside Petroleum limped toward its worst week since September following a delay in its promising Senegal operation, along with continuing global oil fears and the shadow of the Finkel energy market review sucking oxygen out of the domestic energy sector.

Woodside shares closed down 2.29 per cent to $30.31.

At 1700 the Australian dollar was at 75.39 US cents, down from 75.50 US cents on Thursday.

The UK election result lifted the Aussie to 59.48 UK pence, its highest level since mid-April.

ON THE ASX:

*At 1630 AEST, the benchmark S&P/ASX200 was up 1.2 points, or 0.02 per cent, at 5,677.8 points.

*The broader All Ordinaries index was up 0.7 points, or 0.01 per cent, at 5,715.5 points.

* The June SPI200 futures contract was up 7 points, or 0.12 per cent, at 5682 points.

* National turnover was 2 billion securities traded worth $5.4 billion.

Currency Snapshot at 1700 AEST

CURRENCY ASK BID PREVIOUS

AUD/USD 0.7539 0.7538 0.7542

AUD/JPY 83.22 83.2 82.94

AUD/EUR 0.6738 0.6736 0.6724

AUD/NZD 1.0461 1.0453 1.0449

AUD/GBP 0.5954 0.5951 0.5822

GOLD:

The spot price of gold in Sydney at 1700 AEST was $US1,272.2 per fine ounce, down from $US1,287.07 per fine ounce on Thursday

BOND SNAPSHOT AT 1630 AEST:

* CGS 4.50 per cent April 2020, 1.7067pct, from 1.6968pct

* CGS 4.75pct April 2027, 2.4012 from 2.4060pct

Sydney Futures Exchange prices:

* June 2017 10-year bond futures contract at 97.57 (implying a yield of 2.43pct), from 97.570 (2.430pct) on Thursday

* June 2017 3-year bond futures contract at 98.24 (1.76pct), from 98.260 (1.740pct).

(*Currency closes taken at 1700 AEST previous local session, bond market closes taken at 1630 AEST previous local session)

Published on: Friday, June 09, 2017

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