Australian shares shrugged off a poor overseas lead to record a firm gain on Tuesday, with health giant CSL breaking the $100 barrier in a morale-boosting performance, while Suncorp impressed the market with its annual profits result.
Although iron ore rebounded 4 per cent after Monday's plunge, the shares initially declined on the back of poor leads from Wall Street and a dip in price of Brent crude oil, with mining and energy names bearing the brunt of the selling.
However, the market quickly picked up as the big banks rallied and better-than-expected retail sales data lifted investor confidence.
The Reserve Bank kept rates on hold at 2 per cent as expected, but its statement that "the Australian dollar is adjusting to the significant declines in key commodity prices" was taken to mean by many that further cuts may not happen. The ASX 200 fell 17 points after the Bank's mid-afternoon announcement, taking the wind out of a much-needed rally that at one point pushed the benchmark index to a two-month high.
Nevertheless, the benchmark ASX200 added 0.3 per cent to close at 5697.9 while the broader All Ordinaries lifted 0.3 per cent to 5681.9.
"It's a bit stronger than we were expecting it to be," said Morgans private client adviser Alistair McCorquodale. "The headline news was CSL breaking through $100. It's clearly a fantastic business and the market is rewarding it for its continued good management."
Month-on-month growth in retail sales of 0.7 per cent, compared to expectations of 0.4 per cent, spurred the market, he said. "Retail stocks have been a key driver, particularly stocks tied into the housing sector; via the wealth effect, people have the confidence to spend in and around the home.
"Stocks like Harvey Norman, those home furnishing type stocks, clearly benefited from those numbers and from what we've been seeing in the housing market."
Among the banks, ANZ added 0.3 per cent to $32.78, Commonwealth Bank jumped 0.8 per cent to $88.03, while National Australia Bank dipped 0.1 per cent to $34.56 and Westpac fell 0.2 per cent to $34.77
Mixed commodity prices pushed the energy and mining sectors down, with BHP dropping 1.1 per cent to $25.90 and Rio Tinto shedding 0.3 per cent to $52.02.
Fellow blue-chip stock Telstra rose 0.9 per cent to $6.50.
Among consumer stocks, Wesfarmers shot up 1.5 per cent to $43.07, Woolworths edged up 0.4 per cent to $28.72 and Harvey Norman soared 6.1 per cent to $4.72.
But the day belonged to blood products and vaccines supplier CSL, which breached the $100 mark for only the second time in the company's history. It closed 2 per cent higher at $100.77.
CSL has passed $100 previously, in September 2007. Shareholders subsequently approved a three-for-one stock split in October 2007.
Suncorp Group climbed 1.5 per cent to $14.55 after upping its dividend and posting a net profit of $1.13 billion for the year to June - an increase from last year's $730 million despite the insurance giant recording its worst year for natural disaster events.
Origin Energy has given itself more financial breathing space with the $NZ1.8 billion sale of its majority stake in New Zealand power supplier Contact Energy, which will now seek a dual listing in Australia. However, its shares slipped 1.6 per cent to $11.01.
Fairfax Media surged 5.3 per cent to 89.5 cents after announcing the sale of its Tullamarine print site in Victoria for $16 million, with settlement expected on September 21.
Credit Suisse analysts have told clients to keep watch on Federation Centres' shareholder register, suggesting investors may abandon the stock after the group's move to replace chief executive Steven Sewell. Shares fell another 2.1 per cent to $2.81 after dropping 4.2 per cent on Monday.
Macquarie analysts have downgraded Flight Centre's stock to "underperform", saying they still believe the shares are overvalued despite shedding around a fifth of their price following a recent profit downgrade.
The Macquarie team believe that Flight Centre will struggle to remain competitive in the long term due to the higher fixed costs of maintaining its network of stores and have a 12-month price target of $34.92. Flight Centre dived 3.7 per cent to $34.40.
