the spasx 200 ends flat after volatile trading 2445972015
Westpac Banking’s interest rate hike on home loans could cost an average borrower an extra AU$500.
The Australian share market ended nearly unchanged on Wednesday, though it closed well above its worst levels of the day.
A sell-off in the first hour of trade met repeated support around the 5,200 level of the S&P/ASX 200. Shares finally bounced off this level with a mid-session rally that eliminated the day’s losses but failed to make headway into positive territory.
Indices and sectors
The benchmark S&P/ASX 200 fell 5.6 points, or 0.1 per cent, and closed at 5,197.3, while the broader All Ordinaries index was down 4.2 points, or 0.1 per cent, at 5,230.4.
Sectors that closed in the green included consumer discretionary (+0.90 per cent), health care (+0.80 per cent), information technology (+0.53 per cent), industrials (+0.26 per cent) and financials (+0.16 per cent). The losers included energy (-3.37 per cent per cent), telecommunications services (-0.67 per cent), consumer staples (-0.66 per cent) and materials (-0.42 per cent).
Stocks
The energy sector continued to bleed following the correction in crude oil prices. Santos Ltd (ASX:STO) plunged 6.83 per cent to AU$5.18, Oil Search Limited (ASX:OSH) fell 2.99 per cent to AU$7.14 and Woodside Petroleum Limited (ASX:WPL) was down 1.59 per cent to AU$30.86. Origin Energy Ltd (ASX:ORG) fell 7.42 per cent to AU$5.49, and was the top loser on the S&P/ASX 200, alongside Santos and Liquefied Natural Gas Ltd (ASX:LNG).
In mining BHP Billiton Limited (ASX:BHP) fell 0.52 per cent to AU$24.68, Rio Tinto Limited (ASX:RIO) was down 0.69 per cent to AU$53.03, Atlas Iron Limited (ASX:AGO) fell 3.13 per cent to AU$0.03 and Fortescue Metals Group Limited (ASX:FMG) dipped 1.37 per cent to AU$2.16. Fortescue is set to release its quarterly production report today, and according to The Australian, will likely be grilled by analysts and the media on possible asset sales in the context of its huge debt pile of US$7 billion (AU$9.6 billion).
Shares in gold exploration company Northern Star Resources Ltd (ASX:NST) shot up 5.57 per cent to AU$3.03 on the sustained strength in gold prices. The company was the second largest gainer on the S&P/ASX 200. Newcrest Mining Limited (ASX:NCM), Australia’s biggest gold producer, was up 1.11 per cent to AU$14.56.
While Westpac Banking Corp (ASX:WBC) remained in a trading halt due to a capital raising, the other big banks recorded marginal gains. National Australia Bank Ltd. (ASX:NAB) was up 0.90 per cent to AU$31.51, Commonwealth Bank of Australia (ASX:CBA) rose 0.44 per cent to AU$74.56 and Australia and New Zealand Banking Group (ASX:ANZ) gained 0.49 per cent to AU$28.65. Westpac became the first bank in over three years to hike its interest rates, moving out of step with the country’s central bank, the Reserve Bank of Australia. According to the Herald Sun, on an average mortgage, homeowners would need to pay an extra AU$500 a year on account of the higher interest rate charged by Westpac.
The consumer staples sector was mixed. While Woolworths Limited (ASX:WOW) and Wesfarmers Ltd (ASX:WES), the owner of supermarket chain Coles, ended down by 0.71 per cent and 0.86 per cent respectively, Myer Holdings Ltd (ASX:MYR) jumped 2.17 per cent to AU$0.94 and Metcash Limited (ASX:MTS) rose 2.59 per cent to AU$1.39.
In airlines, while Virgin Australia Holdings Ltd (ASX:VAH) fell 3.09 per cent to AU$0.47, Qantas Airways Limited (ASX:QAN) ended higher by 1.88 percent at AU$3.80.
Pub operator Australian Leisure & Entrtmt Pty Mgt Ltd (ASX:LEP) has received a AU$774 million takeover offer from its largest shareholder Caledonia (Private) Investments P/L, which holds 25.84 per cent and is seeking to acquire the rest of the company stock it does not own.
Economic news, currency and market outlook
The Westpac-MI consumer sentiment index showed that confidence jumped 4.2 per cent to 97.8 in October, though pessimists still outnumbered optimists, as gauged from the fact that the index still runs below 100. A reading of one hundred indicates an equal balance between optimists and pessimists. “This result is a little short of the increase we would had expected given the strong boost the government received in the polls following recent leadership and ministerial changes,” said Westpac chief economist Bill Evans, according to Business Insider Australia.
On Wall Street Wednesday, stocks ended lower in response to a disappointing profit outlook from retail giant Walmart, and the modest growth in the economy according to the US Federal Reserve's Beige Book report on regional economic conditions. The Dow Jones Industrial Average closed down 157 points or 0.92 per cent to 16,924. The S&P 500 lost 0.47 per cent to end at 1,994 and the Nasdaq eased by 0.29 per cent to 4,782.
The Australian dollar rebounded above the 73 US cents level following the release of tepid US retail data that raised doubts regarding an interest rate hike this year. At 07:00 am this morning (AEDT) the Australian dollar was trading at 73.07 US cents, up from 72.42 US cents on Wednesday, according to the Business Spectator.
The Australian stock market is likely to open slightly lower given that at 06:56 am (AEDT) the December ASX SPI200 Index (AP) Future contract was down 3 points at 5,171.
