CBA payout helps ASX to record close: Wednesday 11 August

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Steven Deare
(Australian Associated Press)

 

A bumper Commonwealth Bank payout prompted investors to snap up bank stocks as they helped the ASX to its sixth consecutive record high.

The bank’s $6 billion buyback, part of an improved full-year cash profit, generated enough enthusiasm for shares to trade at a record $109.03 on Wednesday.

The biggest player on the ASX had its shares close higher by 1.51 per cent to $108.17.

Most of the big banks have indicated they will return to shareholders funds earlier set aside for COVID-19 losses. All the big banks closed higher.

There was just as much demand for a few other categories.

Investors raised the mining giants despite an overnight slide in the price of their key export, iron ore.

Energy shares were also up after losses for the past two days.

The benchmark S&P/ASX200 index closed higher by 21.7 points, or 0.29 per cent, to a record 7584.3.

The index climbed as high as 7615.1 during trade.

The All Ordinaries closed up 24.2 points, or 0.31 per cent, to 7854.6.

In the US, markets closed mostly lower prior to consumer inflation data due soon.

Deep Data Analytics chief executive Mathan Somasundaram said the figures would influence US Federal Reserve officials’ decision on when to ease support measures for the US economy, such as bond buying.

Mr Somasundaram said any easing of support measures would be followed by higher interest rates.

US inflation surged earlier in the year as the economy rebounded from pandemic lows.

Mr Somasundaram said if the inflation figures beat expectations (4.5 per cent for the year), investors would expect Fed Reserve officials to start winding back support.

He said investors would then sell stocks, which could cause the market to drop.

In Australia, coronavirus lockdowns continue plaguing trade.

Melbourne’s lockdown will be extended by a week after Victoria recorded another 20 infections.

People in Cairns are ready to exit a short lockdown, while millions in NSW must stay at home until the end of the month.

Insurer IAG wants to stop more businesses claiming for COVID-19 damage, after it posted a full-year loss.

The company behind CGU and NRMA is among an industry group challenging in the courts whether business may claim earnings lost due to the pandemic on insurance.

IAG did however reinstate a final dividend, 13 cents per share.

Its stocks fell 2.65 per cent to $5.14.

Among the big miners, BHP was best and gained 1.47 per cent to $52.52. Rio Tinto was better by 1.29 per cent to $129.14. Fortescue was little changed at $22.52.

Stock market software vendor Iress jumped 5.78 per cent to $15.19 after an improved takeover offer.

EQT Fund Management has offered to pay $15.91 for all shares before franking credits.

EQT would also ensure an interim payout of up to 16 cents per share.

Iress said its board will recommend the offer to investors.

Lake Resources, which mines lithium to make electric car batteries, might have found backers for a project in Argentina.

UK export agencies have put forward their interest in providing most of the money required to produce lithium from the Kachi project.

Shares were up 9.57 per cent to 63 cents.

The Australian dollar was buying 73.26 US cents at 1728 AEST on Wednesday, higher from 73.25 US cents at Tuesday’s close.

ON THE ASX

* The benchmark S&P/ASX200 index closed higher by 21.7 points, or 0.29 per cent, to 7584.3 on Wednesday.

* The All Ordinaries closed up 24.2 points, or 0.31 per cent, to 7854.6.

* At 1728 AEST, the SPI200 futures index was higher by two points, or 0.03 per cent, at 7495 points.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 73.26 US cents, from 73.25 cents on Tuesday

* 81.16 Japanese yen, from 81.06 yen

* 62.58 Euro cents, from 62.56 cents

* 53.01 British pence, from 52.99 pence

* 104.76 NZ cents, from 105.09 cents.

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