David Rogers
THE Australian sharemarket closed at a four-day high as resources outperformed and Suncorp held up despite Queensland’s devastating floods.
The benchmark S&P/ASX 200 closed up 13.5 points, or 0.3 per cent, at 4724.2 on light trading volume.
Earlier, the S&P 500 rose 0.4 per cent after Japan committed to buy more than 20 per cent of securities issued by the European Financial Stability Facility.
With London Metals Exchange copper rising 2 per cent, BHP Billiton rose 1.3 per cent to $45.20 and Rio Tinto rose 1.3 per cent to $85.19. Fortescue Metals and OZ Minerals rose by about 4 per cent. Rare earths miner Lynas was back on the boil, up 4.1 per cent to $2.05.
Traders expressed cautious optimism as they awaited a major Portuguese bond auction overnight and the expected peak of the Brisbane River in Queensland’s capital today.
“It was definitely a very positive close, all things considered,” said MF Global senior institutional trader Anthony Anderson. “I guess resource stocks that are largely unaffected by the floods are the place to be. Banks could still be nastily affected by the floods.”
Bank of Queensland fell 3.8 per cent to $9.60, although Suncorp rose 1.2 per cent to $8.29 after hitting a four-month low of $8.05.
After the close, Suncorp said reinsurance would limit the cost of claims relating to flood and storm damage in Queensland since January 8 to between $70 million and $90m and it expected a pre-tax cost of between $130m and $150m.
Major banks mostly lost ground. ANZ was down 0.5 per cent to $22.72, NAB dropped 10c to $23.79, Westpac shed 8c to $21.98, while Commonwealth Bank added 5c to $50.35.
Woodside Petroleum rose 0.9 per cent to $43.58 after Nymex crude oil rose $US1.86 to $US91.11.
However, Caltex fell 5.7 per cent to $14.14 after reporting that the closure of one of its refineries in flood-affected Queensland would cost between $5m and $10m.
Leighton fell 2 per cent to $31.06 after saying some of its construction and contract mining operations may be affected in Queensland by the flooding.
Asciano fell 1.3 per cent to $1.52 after stating that it was not yet able to make a full assessment of the revenue impact of recent severe weather in Queensland and NSW.
“There’s been total focus on the floods today,” said Macquarie Private Wealth investment adviser James Rosenberg. “There is a lot of uncertainty because no one really knows the extent of the economic impact.”
Economists surveyed by Dow Jones Newswires estimate the floods will shave 0.3-0.75 percentage points from Australia’s gross domestic product this year, up from 0.1-0.2 points a week ago.
Senior dealer at City Index Australia, Jian Wei, said speculation about the economic impact of Queensland’s floods disaster was weighing on investor sentiment.
“Investors are keeping an eye out for those companies that are mostly affected, or to be affected, by the flood,” Mr Wei said.
“Insurance companies and coalminers are definitely under pressure. But other players, including tourism, services and engineering contractors, could also be affected.”
Source: wwwtheaustralian.com.au
