By Robb M. Stewart
MELBOURNE, Australia--Australian shares edged higher on Thursday
extending post-election gains on renewed expectations of another
cut in interest rates but failing to hold their intraday high.
The market seesawed early in the session ahead of employment
data showing the economy lost 10,800 jobs in August pushing the
jobless rate to 5.8% and near a peak reached during the worst of
the international financial crisis four years ago.
The first back-to-back decline in jobs in more than two years
underscored the challenge Prime Minister-elect Tony Abbott faces in
boosting an economy cooling as a once booming, mining-industry
investment wanes. It also adds to uncertainty over another rate cut
after data earlier in the week found business and consumer
confidence is on the rise.
"The feverish momentum building over the past week has eased off
slightly," CMC Markets sales trader in Sydney Betty Lam said adding
the momentum behind renewed confidence in Australian equities will
be tested overnight by unemployment claims figures due out in the
U.S.
The S&P/ASX 200 rose 0.2% to close at 5242.5--a fresh more
than five-year high. The index briefly reached 5252.1--topping the
intraday high of mid-May.
Consumer staples, industrials and telecommunications stocks were
the strongest performers while financials lagged.
"The Australian market has weighed up the prospect that jobs are
being lost against a rate cut and pushed up to the highest level in
five years," IG chief market strategist Chris Weston said. "The
prospect of another rate cut has probably helped increase
sentiment."
The index has risen each day in the aftermath of a federal
election over the weekend that swept the conservative
Liberal-National coalition to a majority after six years in
opposition and ending months of political uncertainty traders said
was weighing on business and consumer confidence. Investors'
appetite for equities has been bolstered by strong economic data
from China, Australia's biggest export market, and as the threat of
a U.S. military strike against Syria has receded.
BHP Billiton finished 0.7% higher while rival diversified miner
Rio Tinto nudged up 0.1%. However, Fortescue Metals fell 2.9% as
spot iron ore prices neared their lowest in a month.
Telecoms operator Telstra climbed 1%. Woolworths rose 0.6% and
Wesfarmers, which owns rival retailer Coles, rose 0.5%.
Myer, the country's largest department store, fell 3.8% after it
posted a drop in its annual profit and said it remained cautious
about the year. The stock had risen more than 55% over the past
year.
Warrnambool Cheese & Butter Factory jumped 28% on a bid from
rival Bega Cheese that values it at A$319 million. Bega's shares
rose 5.7%.
National Australia Bank ended the day flat but Commonwealth Bank
and Westpac each lost 0.2%.
Write to Robb M. Stewart at robb.stewart@wsj.com
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