17/12/2008 - 14:31

Market closes flat despite big US lead

17/12/2008 - 14:31

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The Australian stock market closed slightly higher today but investors ignored a big lead from United States markets, instead taking an axe to some major banks.

Market closes flat despite big US lead

The Australian stock market closed slightly higher today but investors ignored a big lead from United States markets, instead taking an axe to some major banks.

At the 1615 AEDT close, the benchmark S&P/ASX200 index had gained 14.4 points, or 0.4 per cent, to 3570.6 points, while the broader All Ordinaries index was up 16.1 points, or 0.46 per cent, at 3515.0 points.

On the Sydney Futures Exchange, the December share price index futures contract was off two points at 3553 points on a volume of 133,601 contracts, according to preliminary calculations.

CMC Markets senior dealer James Foulsham said there had been some really strong gains on United States markets overnight, including in the financial sector, after another interest rate cut there.

The Dow Jones Industrial Average leapt 362.32 points (4.23 per cent) to close at 8,926.85 while the Nasdaq jumped 81.55 points (5.41 per cent) to 1,589.89 and the Standard & Poor's 500 broad-market index vaulted 44.69 points (5.15 per cent) to a preliminary close of 913.26.

It had been expected that the gains would flow on to the Australian market.

However, an announcement by the Commonwealth Bank late on Tuesday that it was raising $2 billion in equity from a placement in two parts had not pleased investors.

"The market has been dominated by what's happened with the Commonwealth Bank," Mr Foulsham said.

"Anything to do with raising money, the market doesn't seem to like at all," Mr Foulsham said.

Mr Foulsham said there was appeared to be some uncertainty in the information released by the bank in relation to the equity raising, which had also unsettled investors.

In the banking sector, the Commonwealth Bank, was steady at $29.15 before it went into a trading halt.

Westpac fell 77 cents, or 4.67 per cent, to $15.72 as it said the integration of St George Bank, which it took over last month, was going well.

The ANZ reversed 66 cents, or 4.6 per cent, to $13.70.

The National Australia Bank was up 12 cents at $19.32 as it said it was in advanced talks to acquire mortgage lender Wizard Home Loans' brand name and Australian distribution network for an undisclosed price from GE Money.

On Wall Street on Wednesday, the Dow Jones Industrial Average index soared 359.61 points, or 4.20 per cent, to 8,924.14 as investors cheered a Federal Reserve decision to cut its key rate to near zero and its pledge of more steps to revive economic activity.

In the resources sector, global miner BHP Billiton improved 31 cents to $30.95, and Rio Tinto lifted $1.12 to $40.32.

Oil and gas producer Woodside Petroleum was $1.40 higher at $36.00, and Santos ascended eight cents to $14.65.

In the gold sector, Newmont was up 10 cents at $5.70, Newcrest picked up 55 cents to $29.95, and Lihir was 10 cents richer at $2.67.

The price of gold in Sydney at 1630 AEST was $US851.20, up $US14.60 on yesterday's close of $US836.60.

Telco Telstra was up two cents at $3.56 and was the top-traded stock by volume, with 90.03 million shares worth $328.87 million changing hands.

Optus-owner Singapore Telecomunications surrendered 10 cents to $2.57.

In the retail sector, Wesfarmers, which owns Coles, put on 13 cents to $16.66. Woolworths jumped 52 cents to $25.75.

In the media sector, Consolidated Media eased two cents to $1.92, and Fairfax dipped two cents to $1.52.

News Corp was rose 40 cents to $12.70, and its non-voting stock was up 34 cents at $11.94.

Among other stocks, gaming group Crown lost 30 cents to $5.14 as it has raised $300 million in equity.

Housing developer Stockland retreated 15 cents to $3.53 as it cut its earnings per security (EPS) outlook by 25 per cent.

Debt-laden Centro Properties surged 2.3 cents to 11 cents after the property investor avoided defaulting on its lenders and won a one-month interim extension for its debt facilities.

Energy retailer AGL Energy fell 16 cents to $14.95 as it said it would buy the Gloucester coal seam gas (CSG) project in New South Wales for $370 million.

Beef producer Australian Agricultural Co found two cents at $1.68 despite saying it expected to post an earnings loss for calendar 2008 as the global financial crisis forced down beef prices.

Preliminary national turnover was 1.35 billion shares worth $4.35 billion, with 473 stocks up, 417 down and 284 unchanged.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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