On Tuesday the Australian sharemarket snapped a four-day period of losing, being led by a rally in the miners and the big banks, but a dip in business confidence hampered investor enthusiasm.
The benchmark S&P/ASX200 lifted 0.6 per cent, or 31 points, to close at the day's high of 5607.9. The broader All Ordinaries gained 0.5 per cent, or 29.7 points, to 5608.6.
As the US market edged lower overnight on Monday, the local index didn't receive any tailwinds from overseas. The S&P 500 pulled back from its record high close, reached on Friday, as energy stocks fell squite steeply.
Reporting season is now finished in the Unites States and Australia, leaving little corporate news to move markets. Instead, investors have turned their attention to central bank policy, which is differing markedly across the world.
"It appears with faltering recoveries in Europe and Japan that their respective central banks are likely to provide more stimulus to their economies," Perpetual head of equities Matt Sherwood said. "Whereas in the US, the Fed will conclude its tapering process in October and then begin the rhetoric of ending its zero interest rate policy." Australia faces a very different path, with mining investment falling and an elevated currency. As Mr Sherwood comments, these headwinds will likely make earnings growth in the 2015 financial year even tougher to come by than over the last 12 months.
Global miners BHP Billiton and Rio Tinto both pushed 1.2 per cent higher to $36.10 and $61.77 respectively, as the benchmark iron ore spot price was unchanged late on Monday at $US83.60 a tonne, with most Chinese participants away for the mid-autumn festival.
"It's hard to see any major tailwind to lift the market up substantially in the next six months or so. There is likely to be increased volatility as the US Fed begins the process of adjusting market expectations for higher interest rates," Mr Sherwood said.
"That's probably going to lead to a selloff in globally, albeit, a temporary one."
Australian business' outlook on the economy is far from rosy, with business confidence falling in August, offsetting the improvement seen in July. Property stands out as the one bright spot for the local economy. Home finance figures for July showed property investors made up 49.7 per cent of total new loans of $28.8 billion in the month.
"While we maintain a positive outlook for the housing market in the year ahead, economic and job security concerns are likely to weigh on housing market sentiment and growth in house prices, home sales and housing finance for some time yet," ANZ senior economist David Cannington said.
Gains from three of the four of Australia's big banks were the main driver of the day. ANZ led the gains, rising 0.6 per cent to $33.48, Commonwealth Bank lifted 0.3 per cent to $81.54 and Westpac inched 0.1 per cent higher to $34.61. NAB bucked the trend slipping 0.1 per cent to $34.63.
Telstra shares gained 0.5 per cent to $5.68 ahead of the release if the iPhone 6 early Wednesday morning. Australia's telcos are expected to battle hard for customers over the new iPhone, with Optus and Telstra announcing they will pay exit fees of rival telcos to lure consumers to its network.
Brambles shares fell 0.4 per cent to $9.48 after the logistics business announced the purchase of UK-based Ferguson Group for £320 million ($555 million). Ferguson provides more than 18,000 containers for the offshore gas industry .
WorleyParsons also announced an acquisition, picking up US gas and oil consultancy MTG. Its shares lifted 0.8 per cent to $15.91. A new report on extra charges, such as meals and baggage placed by low-cost carrier Jetstar showed so-called ancillary revenue made up more than one fifth of the budget airline's revenue.
Qantas shares rose 1.6 per cent to $1.565.
