TA:Australian dollar gains as materials sector lifts sharemarket
The benchmark S&P/ASX200 index was up 6.9 points, or 0.15 per cent, at 4605 points, while the broader All Ordinaries index rose 6.7 points (0.14 per cent) at 4663.60.
The Australian dollar was recently at $US1.0724, up from $US1.0675 late yesterday. Against the Japanese yen, the Australian dollar was at Y86.80, down from Y86.535.
Austock Securities senior client adviser Michael Heffernan said steel stocks were among the best performers today.
BlueScope Steel was 8 cents higher at $1.385 while OneSteel gained 12c (6.22 per cent) to $2.05.
"We're starting off on the right foot and we've more or less been in the green all day and improving in the last bit of the afternoon," Mr Heffernan told AAP.
"The carbon tax issue is something that is overhanging the market at the moment, particularly for those companies that feel they might be harshly treated, or might get off reasonably well."
One of the day's worst performers was Coal & Allied, in which Rio Tinto holds a majority stake. Coal & Allied shed $4.97 (4.73 per cent) to $100.11, while Whitehaven Coal lost 1c to $5.91.
The agriculture sector continued to suffer from the fallout over the government's ban on live cattle exports to Indonesia.
Elders reported a $1 million loss of earnings in June and predicted further losses of up to $7.3m in coming months. Shares in Elders fell 0.5c to 39c, while cattle export heavyweight Australian Agricultural Co lost 0.5c to $1.43.
Mr Heffernan said although export bans had affected the cattle industry, AACo shares gained 7.5c in the past week.
Despite the grounding of competitor Tiger Airways, Qantas lost 3c to $1.99 while Virgin was flat at 31.5c.
"If there's a bit of easing in Qantas's share price today, I'd say it was just a reaction to its strong movement in the last couple of days," Mr Heffernan said.
"Whatever the outcome (with Tiger), Qantas and Virgin can have their week in the sun."
In banking, National Australia Bank lost 18c to $24.96, Commonwealth Bank shed 31c to $51.47, Westpac dropped 8c to $21.89 and ANZ slipped 8c to $21.85.
BHP Billiton gained 22c to $44.45 and Rio Tinto added 28c to $83.60.
Preliminary national turnover was 1.85 billion shares worth $4.55bn. A total of 594 stocks rose, 451 fell and 353 stayed unchanged.
In forex markets, dealers were reportedly awaiting local jobs numbers due tomorrow from the Australian Bureau of Statistics.
With odds diminishing on a near-term rate hike from the Reserve Bank of Australia, traders said a weak jobs number for June would effectively wipe out any lingering bets on a hike. Economists expect 15,000 jobs were created in June, keeping the unemployment rate steady at 4.9 per cent.
"We'd need to have a blockbuster jobs report, employment growth of at least double the 15,000 rise forecast, most of them full-time and unemployment falling below 4.9 per cent, to get RBA rate hike expectations moving up again and give the Australian dollar any chance of getting through resistance at $US1.0800. This seems very unlikely," said John Kyriakopolous, chief FX strategist at National Australia Bank.
After holding rates steady again this month, the RBA flagged a much more worrying outlook in the statement accompanying its decision and signalled it will likely have to cut its 2011 growth forecasts.
A soggy performance on Wall Street overnight and fresh euro-zone sovereign debt worries kept many investors on the sidelines. While recent improved US manufacturing data had eased concerns about the outlook for the world's largest economy, market observers remained cautious.
