THE sharemarket drifted in patchy trade to close marginally lower yesterday, rounding out an otherwise positive week that was characterised by improving sentiment towards the resources sector.
BHP Billiton rose 2.8 per cent and Rio Tinto gained 2.1 per cent. Goldminer Newcrest, one of the hardest-hit large-cap stocks on the market in recent weeks, climbed 3.6 per cent.
After being hurt by disappointing Chinese growth data, oil, gold and industrial metal prices recovered further, fanned by some bargain hunting and encouraging growth in the British economy.
The S&P/ASX 200 slipped 4.9 points, or 0.1 per cent, to 5097.5 in thin trading following Thursday's Anzac Day public holiday, with some investors choosing to stay away yesterday to enjoy a four-day weekend. Declines by some financial and consumer shares, including Commonwealth Bank and Woolworths, helped tip the index lower before the close.
Still, after this week's 3.4 per cent advance the benchmark index is steadily approaching the multi-year high of 5163.5 reached on March 12.
"Stocks that have been the catalyst for the market rising -- the high-yield plays like the banks -- are looking a little bit expensive," said Stephen Hogan, a trader at Novus Capital in Sydney. "Resources have been left behind and the market is starting to see some value there."
Mr Hogan added that Woodside Petroleum's payment of a special dividend was fuelling speculation that other resources companies could follow suit.
Woodside said on Tuesday that it would offer a $500 million special dividend and increase its dividend payout ratio to about 80 per cent of profits in coming years after it delayed large growth projects, partly due to cost pressures.
Anglo-Australian mining giants BHP Billiton and Rio Tinto have also shelved some expansion projects and are attempting to sell assets to shore up their balance sheets, moves that may free up cash to return to shareholders through dividends or buybacks.
In contrast, banks were either weaker or only modestly stronger, with Commonwealth Bank losing 1.2 per cent, National Australia Bank slipping 0.4 per cent and Westpac gaining 0.2 per cent. Supermarket giant Woolworths fell 1.1 per cent and healthcare bellwether CSL sank 1.3 per cent.
Shares in Australian grain trader GrainCorp jumped 7.9 per cent after it agreed to a $12.20-a-share cash takeover from Archer Daniels Midland.
The dollar traded in a narrow range as market analysts weighed the rising prospect of a rate cut as early next month after news of tame inflation in the first quarter. At 5pm AEST, it was buying $US1.031, up US0.4c. Investors were not fazed by the Bank of Japan deciding to keep interest rates on hold.
"The pattern of trading today suggests there was perhaps some reluctance to take new positions into the weekend, particularly ahead of the US GDP release," said Tim Waterer, a senior trader at CMC Markets in Sydney.
