Australian shares higher on financial rebound ahead of trade tariff deadline

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Australian shares advanced for just the third time in ten sessions as modest gains by the big bank stocks offset losses among the major miners following a retreat in base metals prices.

The S&P/ASX 200 index lifted 32.1 points, or 0.5 per cent, to 6215.5, following a quiet overnight trading session as Wall Street which was closed for the US Independence Day public holiday.

The major banks rebounded from yesterday’s poor performances, lifting the index higher with some modest gains. Commonwealth Bank led the market for most of the day, climbing 1.2 per cent to $74.76.

Telstra shares have rebounded from its more than 7-year low last week, rising 1.9 per cent to $2.76 on Thursday and recording six consecutive sessions of gains. Its shares are still down 24 per cent for the year but optimism appears to be creeping back in following the telco’s merger of its venture business with private equity player HarbourVest Partners.

Local gold miners enjoyed a positive day on the market as the price of the precious metal continues to rise from recent lows amid US dollar weakness. The gold price and the US dollar tend to trade in opposite directions. In a note on Thursday morning, ANZ said that the price could break above $US1,260 an ounce.

The Australian sharemarket has closed higher just a day out from the imposition of US trade tariffs on China. Photo: Peter Braig

“This week’s intervention by the PBoC [People’s Bank of China] to stem losses in the yuan has hurt the USD [US dollar] and given investors some confidence to dip their toes back into the gold market.”

Resolute Mining shares rose 3.3 per cent to $1.41, Evolution Mining shares were up 2.4 per cent to $3.49 and Newcrest Mining closed 0.9 per cent higher at $21.76.

Perseus Mining shares rose 10.3 per cent to 48¢ after the company announced record gold production thanks to the strong performance of its Sissingue mine in the Ivory Coast. The mine, which is only in its second quarter of production, helped the company lift its production during the June quarter by 31 per cent from the March quarter.

The news wasn’t so good for the big base metal miners who saw their prices fall following an overnight base metal retreat. BHP Billiton shares fell 0.5 per cent to $32.87, Rio Tinto was down 1.2 per cent to $79.21 and South32 closed 0.8 per cent lower at $3.53.

Bellamy’s Australia recorded its second day of losses as it continues to fall away from its record highs earlier this year. A broker note from Goldman Sachs slashed the company’s target price, saying it it expected the company’s China Food and Drug Administration approval to be delayed for several months. It shares fell 9.6 per cent to $12.77.

Domino’s Pizza Enterprises was downgraded at Credit Suisse and Citi, leading to a big fall on Thursday. Credit Suisse said the company faced several structural risks and that it appeared to have fallen behind its own store growth guidance. Its shares fell 9.1 per cent to $48.92.

By William McInnes
First published by the Sydney Morning Herald
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