RTTNews - The Australian market ended higher on Thursday led by banks after Citigroup analyst upgraded the rating for all the four major banks. Better-than-expected housing data also lifted market sentiment.
In the U.S., stocks traded in negative territory throughout the session but rebounded off the lows and closed with moderate losses amid low volume trading as traders digested weak economic numbers and earnings with increasing hopes of recovery later in the year. A mixed durable goods report and weak demand for Treasury Department's auction for 5-year notes also impacted trader sentiment
On the economic front, the Commerce Department released a report showing a substantial decline in orders for manufactured durable goods for the month of June, primarily due to sharp decline in orders for transportation equipment. The report showed that durable goods orders fell 2.5% in June following a downwardly revised 1.3% increase in May. Economists had expected orders to fall 0.6% compared to the 1.8% increase originally reported for the previous month. Excluding a 12.8% decrease in orders for transportation equipment, orders for durable goods actually rose 1.1% in June compared to a 0.8% increase in May. The increase surprised economists, who had expected ex-transportation orders to come in unchanged.
The Treasury Department said its $39.0 billion sale of five-year notes drew a high yield of 2.625%. Demand was much weaker than expected, with the bid-to-cover ratio coming in at 1.92 compared to the 2.58 posted in the previous auction.
Traders largely shrugged off the Federal Reserve's Beige Book report which indicated that economic activity continued to be weak going into the summer, with most of the twelve Fed districts indicating that the pace of decline has moderated or that activity has begun to stabilize.
Traders also digested quarterly results from Time Warner (TWX), Qwest (Q) and ConocoPhillips (COP) that were largely ahead of expectations.
The Dow fell by 26 points or 0.3% to 9,071, the Nasdaq slipped by 7.75 points or 0.4% to 1,968 and the S&P 500 declined by 4.47 points or 0.5% to 975.
The All Ordinaries Index opened slightly lower at 4,145 compared to its previous close at 4,149 on weak Wall Street cues, but moved above the unchanged line and continued to march ahead on increasing optimism that the worst is over and future will not be as bad as earlier projected. Positive data on housing front and Citi analyst comments lifted market sentiment. The index finally ended the session in positive territory with a gain of 47.00 points, or 1.13% at 4,196. The benchmark S&P/ASX 200 Index also followed a similar trend and ended at 4,190, representing a gain of 47.60 points, or 1.15%.
On the economic front, The Australian Bureau of Statistics reported that the number of residential building approvals increased 9.3% in June compared to May. Residential approvals were down 14.3% compared to one year earlier. The Bureau said private sector building approvals increased 4.9 percent on month. The value of building approvals in June increased 35.9 percent compared to the month before.
Light sweet crude oil for September delivery ended the Asian trading session at $63.23, down $0.12 from its previous close in New York at $63.35 a barrel on Wednesday.
Bank stocks advanced after Citi Group's analyst Craig Williams said he was more optimistic about the outlook of the banks because the economic downturn was likely to be less severe than previously thought, and raised his recommendations on all four banks to 'buy' from 'hold'.
ANZ Bank gained 3.62%, Commonwealth Bank of Australia rose 4.31%, National Australia Bank advanced 3.80% and Westpac Banking increased 2.69%.
Telecommunications major Telstra Corp gained 2.55% on increasing optimism about recovery.
Mixed trend was witnessed among metal stocks after commodity prices declined in the international market. BHP Billiton slipped 0.75%, and Iluka Resources shed 0.65%. However, Rio Tinto edged up 0.17%, Fortescue Metals surged up 6.49%, and Oz Minerals gained 1.37%.
Mixed trend was also witnessed among oil stocks. While Woodside Petroleum added 0.59%, Santos lost 0.76%, Oil Search fell 1.95%, and Origin Energy edged down 0.14%.
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