SYDNEY: Australian stocks retreated from a seven-year high on Friday as a dour economic update from the central bank saw investors shrug off a bounce in oil prices to cash in their profits after a weeks-long rally.
Overnight, the spot price of oil leapt 6 percent as rising violence in Libya, an important producer, helped the market recover from recent declines.
Energy stocks led the market to its highest intraday level since May 2008, matching its record of 12 consecutive days of gains.
But in a statement published mid-morning, the Reserve Bank of Australia said its Tuesday decision to cut rates followed new information suggesting growth would likely stay below trend for longer than previously thought.
“It was steaming along nicely but pretty much since the announcement came out it has fallen,” said Quay Equities Andrew West.
“There’s nothing new out there to keep the momentum running and it’s had such a strong run in the last 10 to 12 days that at some stage a little bit of profit-taking will come in.”
The S&P/ASX 200 index rose up to 0.7 percent before slipping to be up 0.2 percent or 13.4 points at 5824.0 by 0148 GMT. The only other time the benchmark has risen for 12 straight days was also in 2008.
Energy majors all gained, with Woodside Petroleum up 1.6 percent, Origin Energy up 1.7 percent and Oil Search 1.5 percent firmer.
In the broader resources, BHP Billiton rose 0.6 percent after the copper price rose, and Rio Tinto gained 0.8 percent.
Discount airline Virgin Australia rose 3.4 percent after reporting increased second quarter profit.
Grocery majors were stronger, with Coles owner Wesfarmers and Woolworths both up 0.1 percent, while electronics retailers Dick Smith Holdings and Harvey Norman, which benefit from rate cuts, each rose about 0.5 percent.
