Australian shares have defied predictions of a second straight day of carnage as the big banks helped the domestic market recovered its opening losses.
After an initial 1.5 per cent plunge by the S&P/ASX 200 and the All Ordinaries which pulled both indices below 5,000 points, a recovery among key heavyweight bank stocks pushed the market back into positive territory.
Traders had expected heavy falls after panic selling on Wall Street and European markets overnight amid further concerns about China’s slowing economy.
optionsXpress analyst Ben Le Brun said local buyers were doing their best to snap up a bargain after the Australian market experienced its worst one-day drop in more than six years on Monday.
“It’s not as bad as we were anticipating first thing this morning, that’s for sure,” he said.
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“The banks are outperforming the broader market so there might be some detectable signs that investors are willing to step up the the plate.”
He warned things could change quickly when China opens at 1130 AEST.
“Things can turn and things can change so we want to see the open of their market and digest how their market performs today,” he said.
“We’re still down, but we’re not having a second day of vicious selling that we might have anticipated.”
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NAB was up 64 cents, or 2.15 per cent, to $30.35, and Commonwealth Bank added $1.42, or 1.96 per cent, to $73.89. ANZ added 19 cents to $27.10 and Westpac rose 57 cents to $30.02.
The materials sector was performing strongly, helped by Amcor reporting a 35 per cent increase in full year profit. Amcor was up 54 cents to $13.05.
IVF group Virtus Health was up about seven per cent after underlying profit rose 5.1 per cent, while Specialty Fashion declined more than four per cent after it reported a full year loss of $4.5 million die to problems with its Rivers stores.
KEY FACTS
* At 1032 AEST on Tuesday, the benchmark S&P/ASX200 index was up 8.3 points, or 0.17 per cent, at 5,009.6 points.
* The broader All Ordinaries index was flat at 5,014.2 points.
* The September share price index futures contract was up 26 points at 4,977, with 41,697 contracts traded.
* National turnover was 960.3 million securities worth $2.5 billion at 1104 AEST.
