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Australian sharemarket softer for third straight day, banks gain but resources fall

The Australian sharemarket had a positive start but ended up dipping lower for a third straight day as sellers turned on resources stocks.

The benchmark S&P/ASX200 index eased 10.3 points or 0.14 per cent to 7423.9, while the All Ordinaries Index slipped 18.9 points or 0.24 per cent to 7737.4.

CommSec analyst Tom Piotrowski said the local bourse peaked around midday after the futures market had pointed to a stronger start, then faded.

OMG chief executive Ivan Tchourilov described the performance as “a mixed bag … with gains and losses spread evenly between sectors”.

The mining sector went backwards while the banks gained ground – a complete reversal of Tuesday’s dynamic.

“There is a school of thought among analysts that for the moment, the best might be in the rear view mirror as far as the lenders are concerned,” Mr Piotrowski said.

“Competition is going to be a little more intense seeking out new customers. The margins that banks might enjoy could be perhaps in for some challenges as well.

“All of those things in addition to cost factors are some of the reasons that analysts are being a little bit more conservative in their outlook for the lenders.”

Still, ANZ put on 0.75 per cent to $28.12, Commonwealth Bank added 10 cents to $108.91, National Australia Bank surged 4.36 per cent to $30.15 and Westpac improved 0.84 per cent to $22.71.

Bendigo and Adelaide Bank rose 0.88 per cent to $9.22, while Bank of Queensland firmed 0.23 per cent to $8.73.

Mr Piotrowski said NAB outperformed in perhaps a belated response to “a reasonable” full-year result delivered a day earlier.

Mr Tchourilov was more effusive, describing the results as “bumper”.

“The market lay in wait for approval from analysts,” he said.

“The thumbs-up came through this morning, after which the share price jumped.

“NAB more than doubled the dividend after cash earnings came in 76 per cent higher for the year.

“Profit margins widened as costs grew just shy of 2 per cent.

“NAB has been tipped for continued growth by analysts and is poised to take advantage of interest rate hikes whenever they come.”

Rio Tinto gave up 1.65 per cent to $87.51, BHP dropped 2.7 per cent to $35.74, South32 reversed 2.26 per cent to $3.46 and Fortescue shed 2.13 per cent to $14.28.

Bucking the trend was Chalice Mining – which rocketed 28.5 per cent on Tuesday after reporting what it claimed was the biggest nickel sulphide discovery globally in more than 20 years at its Julimar project not far from Perth – jumping 4.94 per cent to $9.13.

The company also said it had made the biggest platinum group elements find in Australian history at the project and analysts were impressed.

“We have adjusted our development scenario for the project, more than doubling the mine life,” Macquarie Research said.

“Securing access to the state forest region to enable drilling to commence on the Hartog target presents a key near-term catalyst.”

Mr Tchourilov said new explorer 8AU Ltd, which was currently in the fund raising process, was one to watch as it had a prospective landholding close to Chalice Mining’s discovery in a geological area known as the Yilgarn Craton.

“The Yilgarn Craton and surrounding farmland have become a hotbed of mining for nickel and copper, among other metals, amid rising demand for electronic vehicles and energy storage components,” he said.

Despite higher oil prices overnight, Woodside backtracked 1.52 per cent to $22.63, Santos weakened 0.43 per cent to $6.92, Beach Energy subtracted 1.53 per cent to $1.29 and Oil Search slid 0.94 per cent to $4.24.

Metal recycler Sims Ltd inched 0.42 per cent higher to $14.39 after providing a trading update saying strong earnings momentum in the second half of fiscal 2021 had so far continued into the first half of the current financial year.

BlueScope Steel slumped 5.84 per cent to $20.

Coles slipped 0.28 per cent to $17.63 after holding its annual general meeting, not revealing much but answering a question from a shareholder about the decision taken earlier this year to axe in-store butchers, with chairman James Graham saying two-thirds of about 1400 permanent or part-time positions had taken redundancies rather than retrain.

In economic news, payroll jobs rose by 1.3 per cent in the fortnight to October 16, as lockdowns and other restrictions eased, following a fall of 0.5 per cent in the previous fortnight, according to the Australian Bureau of Statistics.

The Aussie dollar was buying 73.61 US cents, 54.29 British pence and 63.54 Euro cents in afternoon trade.

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