the asx closes flat as investors turn cautious 2530022015
Investors in ‘wait-and-watch’ as major central banks conduct policy meetings this week.
The Australian share market took a breather after its solid rally in the previous session. Though the market enjoyed sharp upside gains in the opening hour of trade, factoring in overnight losses on Wall Street and the Chinese rate cut, investors sold into the rally and erased all those gains. Financials kept their head above water, though key stocks in telecom and healthcare dragged on the market. Clearly, investors chose to be somewhat cautious, given the slew of central bank board meetings scheduled during the week, as well as imminent bank earnings reports.
Indices and sectors
The benchmark S&P/ASX 200 fell 3.6 points, or 0.1 per cent, and closed at 5,348, while the broader All Ordinaries index was down 1.8 points, or 0.0 per cent, at 5,386.3.
The gaining sectors included real estate investment trusts (0.58 per cent), financials (+0.19 per cent), health care and (+0.15 per cent). Losers included telecom (-1.09 per cent), industrials (-0.71 per cent), energy (-0.20 per cent) and materials (-0.10 per cent).
Stocks
With the exception of National Australia Bank Ltd. (ASX:NAB), which was down 0.06 per cent to AU$32.42, the other major banks ended higher or were flat. Westpac Banking Corp (ASX:WBC) was up 0.89 per cent to AU$31.84, Commonwealth Bank of Australia (ASX:CBA) rose 0.19 per cent to AU$77.50 and Australia and New Zealand Banking Group (ASX:ANZ) was unchanged at AU$28.90.
In mining, BHP Billiton Limited (ASX:BHP) lost 0.08 per cent to AU$24.57, Rio Tinto Limited (ASX:RIO) gained 0.79 per cent to AU$53.81 and Fortescue Metals Group Limited (ASX:FMG) lost 0.78 per cent to AU$2.56. Atlas Iron Limited (ASX:AGO) fell 3.23 per cent to AU$0.03 and BC Iron Limited (ASX:BCI) shed nearly 5 per cent to close at AU$0.29.
In energy, except Oil Search Limited (ASX:OSH), which gained 2.01 per cent to AU$7.60, other major counters ended in the red. Woodside Petroleum Limited (ASX:WPL) was down 0.1 per cent to AU$31.07, Santos Ltd (ASX:STO) fell 0.62 per cent to AU$6.42 and Origin Energy Ltd (ASX:ORG) ended lower by 2.82 per cent at AU$5.85. Liquefied Natural Gas Ltd (ASX:LNG) rose 3.69 per cent and was the third biggest gainer on the S&P/ASX 200.
In telecom services, Telstra Corporation Ltd (ASX:TLS) was the biggest loser, falling 1.25 per cent to AU$5.51, while M2 Group Ltd (ASX:MTU) rose 0.51 per cent to AU$9.84 and TPG Telecom Ltd (ASX:TPM) gained 1.79 per cent to AU$10.79.
Among the healthcare stocks, Ramsay Health Care Limited (ASX:RHC) and Sonic Healthcare Limited (ASX:SHL) both lost about 0.5 per cent and closed at AU$59.83 and AU$18.68 respectively. However, CSL Limited (ASX:CSL) gained 0.53 per cent to end at AU$90.87.
BlueScope Steel Limited (ASX:BSL) was the top winner on the S&P/ASX 200, up 10.57 per cent to AU$4.50, after the NSW government gave the struggling steelmaker payroll tax relief worth AU$60 million. According to the Sydney Morning Herald, the company will save another AU$180 million after cutting 500 jobs and freezing pay of workers. The company said it will continue with its steelmaking operations in the New South Wales Illawarra region following these developments, thereby saving about 5,000 local jobs, according to the ABC.
Shares in Ten Network Holdings Limited (ASX:TEN) were in trading halted before an entitlement offer to give television operator Foxtel a stake of 15 per cent in the company. Network Ten reported a loss of AU$312.2 million for the full year ended August, up from a loss of AU$168.3 million in the prior year, mainly due to a write-down of the value of its TV licence.
Economic news, currency and market outlook
The Reserve Bank of Australia is facing calls from the Australian Retailers Association to cut interest rates in the wake of the recent hikes on home loans by the four major banks, which will suck money out of the retail economy and cut spending during the festive season. "Our concern is if you have an interest rate increase as we've had, it will take money out of the economy and we will see a downturn spend," said Russell Zimmerman, the executive director of the Association, according to the ABC.
On Wall Street Monday, the mainline indices ended with marginal losses, weighed by soft oil prices and the consequent selling in energy shares. Investors also chose to keep a low profile given the Fed’s policy meeting commencing Tuesday. A sharp 3 per cent fall in Apple, on the eve of its earnings report, also depressed the markets. The Dow Jones Industrial Average fell 23.65 points, or 0.13 percent, to 17,623.05, the S&P 500 lost 3.97 points, or 0.19 percent, to 2,071.18 and the Nasdaq Composite added 2.84 points, or 0.06 percent, to 5,034.70.
The Australian dollar is trading steady after the currency clawed back some gains post the Chinese rate cut. At 7am (AEDT), the currency was trading at 72.49 US cents, down from 72.53 US cents on Monday, according to the Business Spectator.
The Australian stock market is likely to open flat as investors in key stock markets, such as the US and in Europe, booked some profits. At 06:45 am (AEDT) this morning the December ASX SPI200 Index (AP) Future contract was up 2 points at 5,334.
