CBA record fails to lift Australian shares

Equities declined as three of Australia’s biggest banks dipped after trading ex-dividend. But the losses were stemmed as the biggest bank, Commonwealth Bank of Australia, hit a record high after showing another bumper profit.

The benchmark S&P/ASX 200 Index inched down just 1.7 points, or 0.03 per cent, on Wednesday to 5496.5. The broader All Ordinaries Index outperformed its large cap counterpart as it managed a 0.5 point, or 0.01 per cent gain to 5475.9, with strategists relieved Tuesday night’s federal budget was less austere than feared and smaller companies set to benefit most from a 1.5 per cent cut to the company tax rate.

Local shares lifted briefly at the start of trade off a positive lead from the Unites States after the Dow Jones Industrial Average and the S&P 500 eked out fresh record highs on Tuesday.

On the first day post-budget, Australian equities closed flat, while 10-year government bonds edged up 0.04 per cent and the dollar jumped above US94¢.

“As an international investor it is very encouraging to see the Australian government show a responsible attitude towards narrowing the debt-to-GDP ratio. While it could have a mildly dampening effect on the local equity market, Tuesday’s budget will be well-received by the global bond market,” Fidelity Worldwide Investments global chief investment officer fixed income and real estate Andrew Wells said.

“It was a bit disappointing to see growth targets below 3 per cent over the next couple of years, but the medium term target of 3 per cent looks good,” Mr Wells said.

Ratings agency Moody’s reaffirmed Australia’s AAA investment rating.

“A tough budget was well flagged and the implications of a slight drag on fiscal growth appear to have already been absorbed by the market,” Dalton Nicol Reid chief investment officer Jamie Nicol said.

New Zealand’s benchmark S&P/NZ 50 Index lifted for the third day in a row, up 0.3 per cent to 5213.4 points ahead of that nation’s federal budget due to be handed down on Thursday. The Kiwi sharemarket hit a record high of 5232.1 earlier this month.

In late trade on Wednesday India’s NIFTY and SENSEX indices were tracking flat for the session. Indian equities have spiked about 6.5 per cent since May 1, with exit polls now tipping the result of the general election to be announced on Friday will install Narendra Modi’s Bharatiya Janata Party and its allies as a majority government.

On the local bourse, resources giant BHP Billiton lifted 0.9 per cent to $38.30 as the company took the first major step in its plan to separate non-core assets by registering its aluminium division as a new company.

BHP’s main rival Rio Tinto dipped 0.1 per cent to $62.78. The spot price for iron ore, landed in China, lifted 0.3 per cent to $US103 a tonne.

The big four banks were mixed. CBA climbed 1.2 per cent to an all-time closing high of $80.89 as the lender reported a jump in third-quarter cash profit to $2.2 billion but provided a cautious outlook for margins and credit growth. It rose as high as $80.99 during the session. ANZ Banking Group added 0.8 per cent to $33.15.

Westpac Banking Corporation lost 94¢ to $34.20 as it traded without the rights to a 90¢ interim dividend. National Australia Bank shed 90¢ to $33.60 as it traded without the rights to a 99¢ interim dividend. The combined losses of the two shares shaved about 20 points off the benchmark index.

Investment bank Macquarie Group fell 84¢ to $59.16 as it traded without the rights to a $1.60 final dividend.

Telstra Corporation is within a whisker of the 12-year high hit in January after gaining 0.6 per cent to $5.28 upon finalising the sale of its Hong Kong mobile phone business for more than $2 billion.

CSR dropped 4.8 cent to $3.34 after showing a strong return to profitability. The building materials supplier reported a $88.1 million net profit for the year ending March 31 as it bounced back from a $150 million loss a year earlier. A 5¢ a share dividend was declared.

Engineering contractor Transfield Services was the best-performing stock in the ASX200, climbing 11.2 per cent to a near six-month high at $1.20 as it finalised a debt restructure with a $US325 million senior unsecured loan note issue.

Private healthcare providers were expected to be a big winner from the introduction of a $7 Medicare co-payment in the budget. But Deutsche Bank analystDavid Low

cut his recommendation on Primary Healthcare and Sonic Healthcare from “buy” to “hold” on Wednesday citing the unexpected $5 reduction in the Medicare rebate. Primary was the worst-performing stock in the ASX 200 down 5 per cent at $4.53, while Sonic lost 4.3 per cent to $17.49.

AGL Energy dropped 1.5 per cent to $15.84 after long-standing chief executive Michael Fraser surprised the market by announcing he will retire in 2015.

This story Administrator ready to work first appeared on 老域名.