Oil stocks lead Aust share market higher

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Petrina Berry
(Australian Associated Press)

 

The Australian share market has closed slightly higher as strong gains in oil stocks, following the US exit from the Iran nuclear deal, helped offset a heavy decline in Commonwealth Bank shares.

The benchmark S&P/ASX200 closed 16.1 points, or 0.26 per cent higher, at 6,108 points, while the broader All Ordinaries index rose 21.2 points, or 0.34 per cent, at 6,204.4 points.

Bell Direct market analyst Julia Lee said energy players benefited from US President Donald Trump’s decision to pull the US out of the Iran nuclear deal and his vow to impose sanctions on the oil-rich nation.

Crude oil prices jumped to near 3-1/2-year highs on Wednesday on worries Mr Trump’s decision would spark fresh tension in the Middle East and restrict global oil supplies.

Woodside Petroleum rose 39 cents, or 1.2 per cent, to $32.35, Santos gained 20 cents, or 3.3 per cent, at $6.25 and Oil Search climbed 10 cents, or 1.3 per cent, to $8.09.

The financial sector slid as Commonwealth Bank’s share price dipped to $70.80 during the session – its lowest level since November 2016 – before closing $2.09, or 2.8 per cent, lower at $71.41.

Australia’s largest listed company delivered a third-quarter cash profit of $2.35 billion, two per cent lower than the average of each of the earlier quarters.

CBA also revealed the number of home loan repayments more than 90 days late rose in the March quarter, and the bank attracted more unwanted headlines when it announced it will pay $25 million to settle its legal stoush with the corporate regulator over bank bill swap rates.

“Commonwealth Bank is the one dragging down the financials space and we saw it hit a multi-year low during the session,” Ms Lee said.

“If it hits below $70 a share we could see some significant support levels broken.

“The bank’s quarterly update today really highlighted the impact rising compliance and regulatory costs are having on its cash earnings.”

The other three major lenders were mixed, with Westpac and ANZ up 0.1 per cent to $29.75 and $27.95 respectively, while National Australia Bank was down 0.8 per cent to $28.72.

In other company news, explosives and fertiliser manufacturer Incitec Pivot dropped 20 cents, or 5.3 per cent, to $3.55 after its first-half profit fell 95 per cent to $7.6 million, hit by drier weather and a $236 million impairment.

Plumbing group Reece came out of a trading halt having completed the institutional part of an equity raising to fund its expansion into the United Sates.

Shares in Reece jumped $1.5704, or 14.8 per cent, to $12.20.

Meanwhile, concerns around consumer spending following weaker-than-expected retail spending data on Tuesday and a higher US dollar have pushed the local currency well under 75 US cents to its lowest level since mid-2017.

At 1630 AEST, the Australian dollar was worth 74.29 US cents, from 75.10 US cents on Tuesday.


ON THE ASX AT THE CLOSE:

* The benchmark S&P/ASX200 was up 16.1 points, or 0.26 per cent at 6,108 points

* The broader All Ordinaries index was up 21.2 points, or 0.34 per cent, at 6,204.4 points

* The SPI200 futures contract was up 11 points, or 0.18 per cent, at 6,088 points

* National turnover was 2.9 billion securities traded worth $6.4 billion.

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