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Category: Business, Economics and Finance / Company News / Markets / Futures / Currency / Stockmarket

Australian market reverses early gains to slip on potential US rate rise

Tuesday, 13 Sep 2016 15:48:37 | Justine Parker

A man watches the information screens at the Australian Stock Exchange (ASX) as share prices fall after the market opened on August 8, 2011. (AAP: Dean Lewins)

The Australian share market has closed lower after rallying at the open as investors remained cautious about the prospect for rate rises in the United States.

Markets at 5:33pm (AEST)

  • ASX 200 -0.2% to 5,208, All Ords -0.2% to 5,310
  • Major gains: News Corp +6% to $18.99, Saracen +6% to $1.41, Credit Corp +5.3% to $17.36
  • Major falls: Worley Parsons -2.5% to $7.66, Japara Health -2.2% to $1.82, APN News -2% to $3.42
  • Futures: Euro STOXX 600 +0.4% to 343.4, FTSE flat at 6,700, S&P 500 -0.7% to 2,137
  • AUD: 75.1 US cents, 56.4 British pence, 76.5 Japanese yen, 66.9 euro cents, $NZ1.027

Stocks jumped in early trading after a recovery on Wall Street overnight after US Federal Reserve official Lael Brainard said she would like to see stronger consumer spending and inflation before raising interest rates again.

But the market lost steam midway through the day despite some stronger than expected economic data from China.

Telecommunications shares had the biggest losses, as investors reassessed stocks favoured for their dividend yield. Telstra lost 1 per cent to $4.94.

The big banks were also a drag with NAB faring the worst, down 1.3 per cent to $26.25, while Commonwealth Bank lost 1 per cent to three year lows of $69.50.

JB Hi-Fi shares are in a trading halt after the electronics retailer announced its much anticipated acquisition of the Good Guys for $870 million. JB Hi-Fi will fund the deal through a share sale and taking on an extra $500 million in debt, and the two businesses will continue to run independently.

Rival Harvey Norman slipped 0.2 per cent to $5.04.

In economic news, NAB's latest business survey found business confidence rose by two points in August. Conditions slipped again, but remains stronger than average.

NAB economists said the survey suggests the recovery of non-mining sectors may have slowed, but they remain confident in the economy's prospects over the next few months.

The dollar is weaker against most major peers and was buying 75.3 US cents around 5:00pm.

On commodity markets, oil prices were down. Brent crude was 1.2 per cent lower at $US47.71 a barrel, while spot gold was steady at around $US1,329 an ounce.

AustraliaPlus


 

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