Wednesday, June 15, 2011

Stocks weaker despite positive leads | WA Business News

Australian shares have opened slightly weaker, despite positive leads from the US and Europe, after a strong day of local trading yesterday.

At 1010 AEST, the benchmark S&P/ASX200 index was down 6.5 points, or 0.14 per cent, at 4,578.5, while the broader All Ordinaries index was down four points, or 0.09 per cent, at 4,647.1.

On the ASX 24, the June share price index futures contract was 8 points lower at 4,578 points, with 34,169 contracts traded.

Intersuisse director of equities Andrew Sekely said the local market had risen on Tuesday after promising economic data out of China but had fallen on Wednesday despite a jump in US stocks.
"It's quite disappointing on Wednesday, considering the lead we got from overseas," Mr Sekely said.

"Yesterday our market went up, which in a way, pre-empted the good news from the US last night."

US stock markets jumped more than one per cent on Tuesday, giving investors some relief after a six-week losing streak culminated in a brutal sell-off last week.

The Dow Jones Industrial Average was up 123.14 points (1.03 per cent) to reach 12,076.11 in final trade.

European stocks also closed higher on Tuesday after recent sustained losses as a series of data reassured investors fearful that the global economy was slowing badly.

Mr Sekely predicted a relatively subdued day on the Australian stockmarket on Wednesday.

"There is little at the moment to pin a positive market performance onto," he said.

"There's talk of higher interest rates, a weak US economy, carbon tax... and with continued negative news from Europe, there's not much to be positive about."

In economics news, the Australian Bureau of Statistics (ABS) issues data on dwelling unit commencements in March, and Westpac and the Melbourne Institute release their Survey of Consumer Sentiment for June.

In Brisbane, the governor of the Reserve Bank of Australia (RBA), Glenn Stevens, addresses an Economic Society of Australia luncheon.

There is no significant equities news scheduled for today.

Among the banks, Commonwealth Bank of Australia was up 12 cents to $50.57, ANZ lost 13 cents to $21.70, NAB fell 2 cents to $24.50 and Westpac was 6 cents lower at $22.04.

The mining and resources sectors opened lower.

BHP Billiton lost 10 cents to $43.05 and Rio Tinto gained one cent to $80.21.

The spot price of gold was $US1,525.10 per ounce, down $US2.55 from Monday's close of $US1522.55 per ounce.

In other news, Downer EDI Ltd says RailCorp has completed the inspection process for the first Waratah train and that Downer and RailCorp are ready for practical completion.

Downer shares were 12 cents higher at $3.90.

Qantas Airways Ltd says it will cut growth in its capacity and take delivery of fewer aircraft in response to a weak domestic market.

Qantas shares were half a cent lower at $1.88.

Rio Tinto says it will accelerate its Pilbara iron ore expansion program in Western Australia by spending $US350 million ($A329 million) on early works and procurement.

Shares in QBE Insurance Group fell almost four per cent to their lowest in over six months after the company cut the forecast for insurance profit margins because of the occurrence of catastrophes.

At 1030 AEST QBE shares were 69 cents lower at $16.59.

At 1056 AEST, preliminary national turnover was 573 million securities worth $1.19 billion, with 405 stocks up, 301 down and 351 unchanged.

Source: http://www.wabusinessnews.com.au/en-story/1/89558/Stocks-weaker-despite-positive-leads

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