Aussie shares defy regional gloom

AUSTRALIAN stocks recovered from a morning slump to end the week on a high, but a strong greenback has battered the Aussie dollar.

The benchmark S&P/ ASX200 index was up 9.2 points, or 0.15 per cent, to 6185.5 points yesterday, while the broader All Ordinaries index was 7.2 points, or 0.11 per cent, higher at 6301.1 points.

Bell Direct equities analyst Julia Lee said Australian stocks had “bucked the trend” as the only markets in the region finishing in the black yesterday.

Robust US economic data and a surge in Treasury bond yields pushed exposed local stocks higher, particularly in the insurance, healthcare, commodities and IT sector.

“As bond and interest rates rise, it becomes more attractive for companies to park their money in the US,” Ms Lee said.

With the Reserve Bank unlikely to put up interest rates for another year, she predicts the Aussie will keep falling to below US 68 cents — levels last seen during the global fi- nancial crisis. After a small spike following the release of better-than-expected retail data, the Aussie was buying 70.70 US cents late yesterday.

The mining sector pared back earlier gains but was still higher with heavy materials up 0.02 per cent, with BHP eking out the biggest gains, up 0.25 per cent to $35.50.