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Banks drag as miners and Telstra push higher

Good news from Chinese manufacturers has led the local share market to a flat start as investors go in search of value in the S&P/ASX 200 (ASX: XJO) (Index: ^AXJO), held back by a selloff in the financial sector.

China’s official manufacturing PMI rose to 50.3 vs the 49.8 expected by the market. As a result, local miners BHP (ASX: BHP), Rio Tinto (ASX: RIO) and Fortescue (ASX: FMG) are higher.

Despite a looming interest rate cut, investors have dumped the banks and headed to shares in Telstra (ASX: TLS) and Woodside Petroleum (ASX: WPL), up 0.8% and 1.2% respectively.

Our biggest telco is poised to release strong results for FY13 but operates at a robust earnings ratio. However, some investors are determined to take advantage of rumours that both Woodside and Telstra may pay higher dividends in the next 12 months.

The big four banks are lower today as investors take profits from the recent surge in prices and local manufacturing drops for the 25th consecutive month. Mining services stocks are stand out performers in top 200, with Boart Longyear (ASX: BLY) and Ausdrill (ASX: ASL) up more than 4.5% at midday.

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Motley Fool contributor Owen Raszkiewicz owns shares in Ausdrill.

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