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ASX closes 0.52pc up despite CBA earnings

·4-min read

Australia's share market has closed higher despite the Commonwealth Bank posting first-half earnings that show times remain difficult in the banking sector.

The S&P/ASX200 benchmark index closed higher by 35.7 points, or 0.52 per cent, to 6856.9 on Wednesday.

The All Ordinaries closed up by 31.7 points, or 0.45 per cent, at 7133.8.

All sectors bar consumer discretionaries were higher. Information technology led gains with 3.12 per cent, while there were gains of more than one per cent for property, utilities and consumer staples.

The ASX result followed most Asian markets, and rose more than the marginal increases and declines from US markets earlier.

The biggest company on the ASX, the Commonwealth Bank, closed lower by 1.49 per cent after missing investor's expectations of its first-half earnings.

The bank reported a cash profit of $3.8 billion for the first six months of 2020/21, slightly below estimates.

Investsmart market strategist Evan Lucas was concerned.

"Even in a stronger economy from October to December, the biggest bank in the country is still finding it hard," he said.

"However the home loan market has started to move and they could have a better second half."

Mr Lucas was wary that loan repayments for about 25,000 homes, or $9 billion, remained deferred amid the pandemic.

"The bank clearly still has risk around bad and doubtful debts," he said.

CBA will pay investors an interim dividend of $1.50 per share.

The Commonwealth's report did not bode well for investors in other banks, Mr Lucas said.

ANZ slipped 0.36 per cent to $24.84, NAB fell 0.2 per cent to $24.98, while Westpac gained 0.27 per cent to $22.23.

Meanwhile, the nation's latest coronavirus concern has prompted South Australia to impose border restrictions on Melbourne residents.

Eight people have been infected following an outbreak at a hotel at Melbourne Airport.

At Crown Resorts, three directors resigned after a damning report on Tuesday which found the company unfit to run a Sydney casino.

One was John Poynton, who represented James Packer's Consolidated Press Holdings.

An inquiry found Crown allowed money laundering through subsidiaries' bank accounts and failed to act when notified.

NSW Independent Liquor and Gaming Authority chair Philip Crawford is preparing to discuss the Sydney casino licence with the gaming giant.

Crown shares closed lower by 3.35 per cent to $9.81.

Insurance Australia Group says it is trying to clarify how business interruption claims can be made from COVID-19, after a first-half loss of $460 million due to the pandemic.

IAG, which has brands including CGU, NRMA and SGIO, reported the loss having in November put aside $1.15 billion for possible business claims from coronavirus.

The company will pay an interim dividend of seven cents per share, unfranked. This is lower than the previous interim dividend of 10 cents per share, 70 per cent franked.

Shares closed higher by 4.55 per cent to $5.29.

Among the big miners, BHP was up 1.03 per cent to $45.06, Fortescue was down 0.59 per cent to $23.75 and Rio Tinto was better by 0.74 per cent to $117.43.

On Thursday, companies reporting first-half earnings include energy provider AGL, financial services provider AMP, share market operator ASX, Telstra and Transurban.

The Aussie dollar was buying 77.38 US cents at 1719 AEDT, higher from 77.29 US cents at Tuesday's close.

ON THE ASX

* The S&P/ASX200 benchmark index closed higher by 35.7 points, or 0.52 per cent, to 6856.9 on Wednesday.

* The All Ordinaries closed up by 31.7 points, or 0.45 per cent, at 7133.8.

* At 1719 AEDT, the SPI200 futures index was lower by one point, or 0.01 per cent, at 6798 points.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 77.38 US cents, from 77.29 cents on Tuesday

* 80.93 Japanese yen, from 81.00 yen

* 63.83 Euro cents, from 63.94 cents

* 55.99 British pence, from 56.05 pence

* 107.03 NZ cents, from 106.58 cents.