SYDNEY - Australian shares struck a record high yesterday as firm oil prices stoked a rally in Woodside Petroleum and Santos, and interest-rate-sensitive banking stocks bounced after the central bank's soothing comments on the economy.
The Australian S&P/ASX 200 index was up 34 points, or 0.8 per cent, to 4411.3,
smashing the previous best of 4399.2 struck last week. It fell 0.3 per cent last week and is now up on 12 of the past 14 trading days.
"The Reserve Bank believes that the economy is growing at a sustainable pace and it has toned down its rhetoric about the need for future rate hikes," said Craig James, chief economist (equities) at Commonwealth Securities.
"So a period where the economy is growing at sustainable pace and interest rates are on hold is clearly good news for the sharemarkets" and banking should benefit.
Ric Klusman, a Hudson Securities dealer, said the market was supported by strong cash positions, with Woodside benefiting from oil's spike.
Small iron ore miner Aztec Resources jumped 9.1 per cent to 18Ac after the company reported encouraging findings from a feasibility study, which could lead to the development of an iron ore mine in Western Australia.
Commonwealth Bank, Australia's biggest mortgage lender, rose 1.2 per cent to A$39.16 ahead of its earnings tomorrow. The bank's second-half profit is seen rising 27 per cent on buoyant lending and savings from restructuring.
National Australia Bank, the nation's largest bank by assets, added 0.3 per cent and Westpac climbed 0.6 per cent after the Reserve Bank dropped its earlier assertion that interest rates would likely have to rise again to contain inflation.
Woodside gained 2.8 per cent to A$31.24 on news it was planning a new liquefied natural gas project in Western Australia. Rival Santos advanced 1.1 per cent to A$10.92. The two stocks lifted the energy sub-index 1.5 per cent as crude oil futures nudged closer to US$63 a barrel.
- REUTERS
