The Australian share market managed to close marginally higher, up 3 points, despite a surprise move from the RBA, lifting the interest rate by a quarter of a percent. Banks were the best performers as they are expected to charge borrowers more than the official increase.
The S&P/ASX200 Index is 3 points higher to finish at 4,701. On the futures market, the SPI200 is up 1 point. In economic news: The RBA this afternoon lifted the cash rate 0.25% to 4.75%, its first move since May. Concerns about inflation as labour market conditions improve and modest amounts of spare capacity were behind the decision.
To company news: Following the RBA’s decision, Commonwealth Bank of Australia Ltd (ASX:CBA) has announced a 45 basis points increase in its standard variable rate, almost double the 25 basis points from the RBA. The bank says as a result of continued increases in funding costs, it will lift its variable home loan interest rates from this Friday. The rise comes after a series of warnings from Australian Bank’s, and the Commonwealth’s CEO Ralph Norris, that margins are being impacted by rising funding costs. Commonwealth Bank’s shares lifted 1.78% to close $50.19.
Leighton Holdings Ltd (ASX:LEI) has cautioned its profit is expected to drop because of difficulties with its Brisbane Airport Link project, a strong Australian dollar and profit downgrade from Macmahon Holdings (ASX:MAH) which it owns a stake in. The development and contracting company says net operating profit is now anticipated to reach around $510 million while annual revenue will be around $20 billion. Leighton will officially release its results this Thursday, following a profit result of $615.13 million posted in the last financial year. Shares in Leighton Holdings slid 7.02% to close at $33.75.
Westfield Group (ASX:WDC) has entered into a trading halt, pending a possible announcement due tomorrow, on a potential transaction involving the property group.
Shares in Ardent Leisure Group (ASX:AAD) lifted following news the entertainment-focused company had a strong start to the new financial year, flagging a return to positive like for like performance in the September quarter.
BHP Billiton Ltd’s (ASX:BHP) $40 billion hostile bid for PotashCorp has received encouraging news, with reports suggesting that Canadian regulators will offered cautious approval of the takeover, with a final decision due on Wednesday.
MAp Group (ASX:MAP) has posted a 19.5 per cent rise in earnings and a 7 per cent lift in traffic for the nine months to September this year. The majority owner of Sydney Airport says the airport delivered 9 per cent traffic growth in the period.
In the best and worst performers: The best performing sector at close was Financials Excluding Real Estate Investment Trusts with the index rising 32 points to 5,195. The worst performing sector was Industrials with the index dropping 23 points to 3,744. The best performing stock in the S&P/ASX200 was Kagara shares were 5.92% firmer at $0.805. Shares in Ardent Leisure and Nufarm also closed stronger. The worst performing stock was Medusa Mining with shares dropping 8.8% to close at $5.39. Shares in Leighton Holdings and Hastie Group closed weaker today.
In commodities: Gold is trading at $1356 US an ounce. And light crude is up $0.45 at $83.40 US a barrel.
