Australian stocks: Market weaker in light trading
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Australian stocks: Market weaker in light trading
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7:38PM Wednesday May 13, 2009
MELBOURNE – The Australian share market closed weaker in light trading as investors showed caution after recent gains and the digestion of Tuesday’s federal budget.
At 1615 AEST, the benchmark S&P/ASX200 index was down 21.1 points, or 0.54 per cent, at 3856.1, while the broader All Ordinaries index also dropped 21.1 points, or 0.55 per cent, to 3842.5.
On the Sydney Futures Exchange at 1615 AEST, the June share price index contract was 16 points lower at 3853 on volume of 22,445 contracts.
IG Markets research analyst Ben Potter said there was little apparent fallout from Tuesday night’s federal budget showing up in the market.
“We are seeing the discretionary sector like Harvey Norman and JB Hi Fi suffering a bit because some brokers said next year is likely to see a lot less stimulus from the government,” he said.
Harvey Norman finished the day down nine cents at $3.11 and JB Hi-Fi ended three cents weaker at $13.26.
“It has been a battle all day between the bulls and the bears … there is a very, very low volume on the market, which is a good thing when you see down days,” said Mr Potter said.
“The market has had a very good run for the past two months,” he said.
“We are getting a bit of a pull-back, we are not getting much in terms of points.”
Banks ended the day mixed after Commonwealth Bank said it would cut its final 2009 dividend by 25 per cent.
Despite this, Commonwealth shares rose 14 cents to $36.74, and Westpac put on 22 cents to $20.60.
Shares in National Australia Bank finished down 14 cents at $21.72, while ANZ was down 26 cents to $15.71 and Macquarie Group fell $1.10 to $34.75.
“That (Commonwealth Bank news) was expected, all the other banks have done it (cut dividends) between 20 to 25 per cent,” Mr Potter said.
“The broad numbers were in line with estimates. I think probably in a rising market they would probably be up a bit more than they are now,” he said.
The mining sector had a fairly strong day but Rio Tinto fell $3.23, or 4.72 per cent to $65.25, on speculation it may seek an alternative to a proposed US$19.5 billion (A$25.50 billion) investment deal with Aluminum Corporation of China (Chinalco).
“There was a meeting in London of shareholders last night which coincided with a note out from Barclays (investment bank) that said the terms of the agreement with Chinalco are very shareholder unfriendly,” Mr Potter said.
Shares in global miner BHP Billiton strengthened 12 cents to $34.43.
Among the gold miners Newcrest put on 45 cents to be $30.15 and Newmont increased 21 cents to $5.80, while Lihir Gold rose four cents to $3.10.