By Robb M. Stewart
MELBOURNE, Australia--Australia's stock market advanced for the
sixth straight session to close Tuesday at the highest level since
June 1, as banks helped drive broad gains.
Still, mining stocks took another hit after commodity prices
fell in the wake of a stronger U.S. dollar and expectations the
Federal Reserve is preparing to raise interest rates for the first
time in nearly a decade.
The S&P/ASX 200 ended up 0.4% at 5706.70.
The Australian dollar was relatively steady, trading in a narrow
range above six-year lows ahead of second-quarter inflation data
and a speech by Reserve Bank of Australia Gov. Glenn Stevens due
Wednesday.
Bank shares continued a weeklong recovery, with National
Australia Bank Ltd. (NAB.AU) rising 1%, Westpac Banking Corp.
(WBC.AU) gaining 0.9% and Australia & New Zealand Banking Group
Ltd. (ANZ.AU) adding 0.6%. Commonwealth Bank of Australia (CBA.AU)
slipped 0.3%.
The industry regulator on Monday issued guidelines for the
largest lenders to raise the amount of capital they hold against
the estimated risk in the mortgage books, a response to
recommendations made in a broad government-backed review of the
financial industry released late last year. Several analysts said
the banks should be able to raise the capital by retaining earnings
or through dividend reinvestment plans, and over time would likely
offset the burden by cutting discounts or raising the cost of
loans.
Among energy shares, Oil Search Ltd. (OSH.AU) rose 3.9% after it
lifted its production guidance for the year, having posted an
output of 7.41 million barrels of oil equivalent in the second
quarter. Woodside Petroleum Ltd. (WPL.AU) was flat and Santos Ltd.
(STO.AU) lost 0.9% as oil prices remained under pressure in Asia
trade Tuesday.
Gold and silver prices continued to trade close to their lowest
level in five years, with gold dipping below the psychological mark
of $1,100 an ounce in early Asia hours.
Newcrest Mining Ltd. (NCM.AU), which sank 10% on Monday, fell
another 1.5% Tuesday. Smaller gold producers were also weaker, with
Evolution Mining Ltd. (EVN.AU) down 2.6%, Medusa Mining Ltd.
(MML.AU) down 3.4% and Perseus Mining Ltd. (PRU.AU) and Saracen
Mineral Holdings Ltd. (SAR.AU) off 4.1% and 5.1%, respectively.
Elsewhere in the mining sector, BHP Billiton Ltd. (BHP.AU) fell
0.6% and Rio Tinto Ltd. (RIO.AU) lost 0.9%.
Write to Robb M. Stewart at robb.stewart@wsj.com
