By Robb M. Stewart
MELBOURNE--Australia's equities market has paused in its push to
fresh highs following the election of a conservative government,
although a renewed appetite for risk has traders pointing to
further gains ahead.
Mining and financial stocks were marginally lower in midday
trading Thursday, holding back the wider market after it hit a new
closing high for the year the day before. The benchmark index
remains poised to match the year's intraday peak, a five-year high
hit in mid-May.
"Investors' fear of missing out, combined with momentum traders
riding market strength, could see strong upside emerge over the
next week," said Tim Radford, an analyst at Rivkin Securities Pty.
Ltd. in Sydney.
At 0200 GMT, the S&P/ASX 200 index was three points higher
at 5236, having traded marginally in the red earlier in the
day.
Chay Flack, an equities dealer at CMC Markets Stockbroking, said
the index looks set to challenge the 5249.6 peak reached May 15,
supported by positive sentiment after gains overnight on Wall
Street as concerns over a military strike against Syria recede.
Australian stocks have risen steadily since the Liberal-National
coalition swept to power in a national election over the weekend,
ending months of political uncertainty that traders had said was
weighing on business and consumer confidence. Investors have also
been bolstered by strong economic data from China, Australia's
biggest export market.
Still, after the push higher, the market could face resistance
if it breaches May's high.
"With the Fed looking at tapering next week and the German
elections...increased volatility is certain," said Evan Lucas, a
market strategist at IG in Melbourne. "We are due for a pullback
after such a strong run; it would be healthy and give the market a
chance to reset for a final push into Christmas."
The market brushed aside as-expected data that showed
Australia's unemployment rate rose to a seasonally adjusted 5.8% in
August from 5.7% the month before, although the local currency took
a knock and fell as low as US$0.9278 from US$0.9343.
BHP Billiton was little changed, although rival diversified
miner Rio Tinto was up 0.3% and iron-ore producer Fortescue Metals
was down 3.2%.
The country's largest banks were lower, with Commonwealth Bank
and Westpac both down 0.4%
Myer fell 2.3% after the retailer reported a drop in its annual
profit and it said it remained cautious about the year ahead given
the outlook for the economy and consumer confidence. The stock had
climbed more than 55% over the last year.
Warrnambool Cheese & Butter Factory jumped 33% on a bid from
rival Bega Cheese that valued it at A$319 million. Bega's shares
were up 2.9%.
Write to Robb M. Stewart at robb.stewart@wsj.com
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