australian stocks end in the black after six losing sessions 1550802015

Energy stocks post good gains as crude prices rule firm

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By :  ,  Financial Analyst

Australian stocks managed to scrape through into positive territory at the end of Wednesday’s volatile trading session, aided chiefly by gains in the energy sector.

Indices and sectors

The benchmark S&P/ASX 200 rose 7.3 points, or 0.1 per cent, and closed at 5,478.6, while the broader All Ordinaries index was up 6.3 points, or 0.1 per cent, at 5,486.

The sectors that closed with gains were energy (+1.43 per cent), consumer staples (+0.72 per cent), information technology (+0.52 per cent) and real estate investment trusts (+0.52 per cent). The losing sectors included telecommunication services (-0.88 per cent), healthcare (-0.84 per cent), consumer discretionary (-0.39 per cent) and utilities (-0.28 per cent).


The energy sector was the best performer in Wednesday’s trading. Woodside Petroleum Limited (ASX:WPL) shot up 1.74 per cent to AU$36.22, Origin Energy Ltd (ASX:ORG) gained 0.72 per cent to AU$12.65, Oil Search Limited (ASX:OSH) rose 2.91 per cent to AU$7.43 and Santos Ltd (ASX:STO) was up 0.87 per cent to AU$8.07.

Amongst miners, BHP Billiton Limited (ASX:BHP) was up 0.22 per cent to AU$27.66, Rio Tinto Limited (ASX:RIO) fell 0.53 per cent to AU$56.07 and Fortescue Metals Group Limited (ASX:FMG) was down 2.5 per cent to AU$2.23.

In the banks, with the exception of Australia and New Zealand Banking Group (ASX:ANZ), which fell 0.22 per cent to AU$31.09, the other three closed with gains. Commonwealth Bank of Australia (ASX:CBA) was up 0.11 per cent to AU$79.91, Westpac Banking Corp (ASX:WBC) gained 0.03 per cent to AU$31.36 and National Australia Bank Ltd. (ASX:NAB) rose 0.73 per cent to AU$31.83.

Amongst retailers, Woolworths Limited (ASX:WOW) shot up 1.18 per cent to AU$27.43, Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, gained 0.65 per cent at AU$41.55 and Caltex Australia Limited (ASX:CTX) was up 0.94 per cent to AU$32.07. However, Myer Holdings Ltd (ASX:MYR) fell 1.85 per cent to AU$1.33.

Economic news, currency and market outlook

Speaking at a business lunch in Brisbane, Reserve Bank of Australia governor Glenn Stevens said the central bank was prepared to cut the bank rate again if required, though it would be “quite some time before we even think about interest rates going up.” However, he was apprehensive about the boom in property prices in Sydney. "I am very concerned about Sydney, I think some of what's happening is crazy, but we've got a national focus to manage as well – that just increases the complexity," he said, as quoted by ABC. "On whether or not that stays any hands [on interest rates], I have no comment."

Credit rating agency Moody’s placed Western Australia on a negative credit outlook citing ongoing deterioration in its financial and debt metrics, as well as the apparently unachievable lower spending forecasts set out in its budget. "Moody's thinks that the state will be hard pressured to achieve the much lower level of current spending forecast, unless the Government fortifies its commitment to budget improvements," the agency said. "Projections rely on reducing the average rate of spending to 2.5 per cent, and to as low as 1.9 per cent in 2017/18, compared with the 6.2 per cent rate registered over the last four years."

On Wall Street overnight, stocks rebounded as crude oil prices rallied and Greece negotiations showed signs of progress. Dow Jones Industrial Average rose 236.36 points, or 1.33 percent, to 18,000.4, the S&P 500 gained 25.05 points, or 1.2 percent, to 2,105.2 and the Nasdaq Composite added 62.82 points, or 1.25 percent, to 5,076.69.

The Australian dollar is currently trading slightly higher after bank of Japan Governor Haruhiko Kuroda said the yen was unlikely to depreciate further, according to Business Spectator. At 07:00 this morning (AEST), the Aussie was trading at 77.10 US cents, down from 77.17 US cents on Wednesday.

The Australian stock market is likely to open higher today given that at 06:45 this morning (AEST) the June ASX SPI200 Index (AP) Futures was up 51 points at 5,526.

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