Wednesday, June 8, 2011

Australian stock market june 8 2011, falls on Bernanke's US economic outlook

Australian stock market june 8 2011, falls on Bernanke's US economic outlook : PROFITEERING descended on the Australian sharemarket today, pushing the bourse to a 12-week low after US Federal Reserve chairman Ben Bernanke cast doubt on the strength of US economic growth yesterday.

The benchmark S&P/ASX 200 index was down 29.5 points, or 0.64 per cent, at 4536.80, while the broader All Ordinaries was lower by 32.4 points (0.69 per cent) at 4608.70.

Richard Herring, head of trading at Burrell Stockbroking, said profit-takers caused the local market to follow Wall Street lower after starting the trading session on a positive note.

Fifteen minutes before the US closing bell, Dr Bernanke said the weak housing sector was holding back the recovery and that job creation was in a "far from normal" slump.

"Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established," he said in Atlanta, Georgia.

"There may have been a little bit of disappointment following his comments," Mr Herring said.

"The US market opened quite firm and continued to give ground over the course of the day and we've followed a fairly similar pattern today.

"Volumes again (are) indifferent but the selling is pretty widespread - anything from gold to banks to resources."

Energy and consumer discretionary stocks suffered the worst falls, with sector heavyweight Woodside Petroleum slumping $1.17 (2.6 per cent) to $43.88.

Rival Santos fell 28c (1.99 per cent) to $13.76 while Oil Search slipped 5c to $6.59.

Among retailers, David Jones fell 9c (2.21 per cent) to $3.99, a two-year low, and JB Hi-Fi plunged 40c (2.42 per cent) to $16.12, a 22-month low.

Market heavyweight BHP Billiton gave up 17c (0.4 per cent) to $42.79 and Rio Tinto gained 31c to $79.60.

Gold producers were "harshly treated", Mr Herring said.

Gold major Newcrest Mining lost 70c (1.82 per cent) to $37.66, Kingsgate Consolidated fell 46c (5.34 per cent) to $8.16 and Resolute Mining dropped 3.5c (3.17 per cent) to $1.07.

The spot price of gold in Sydney was $US1542.10 per fine ounce, down $US4.18 from yesterday's closing price.

Major banks were mixed, with Westpac and ANZ nudging up 1c each, to $21.53 and $21.34 respectively, but National Australia Bank fell 36c (1.47 per cent) to $24.08 and Commonwealth Bank lost 41c (0.82 per cent) to $49.32.

Macquarie Group plunged 99c (3.09 per cent) to $31.01 after investors digested Citi's downgrade of the stock yesterday.

Growth stocks also fell victim to the sell-off, Mr Herring said.

CSL lost 40c (1.19 per cent) to $33.23 and QR National declined 9c (2.74 per cent) to $3.20.

Coffey International was a rare bright spot, surging 12c (24.49 per cent) to 61c, after announcing it expects an earnings loss in fiscal 2011 as it undertakes a corporate restructure.

Fortescue Metals Group gained 12c (1.93 per cent) to $6.35.

Preliminary national turnover was 1.8 billion shares worth $5.3bn, with 413 stocks up, 656 down and 418 unchanged.
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