03/10/2008 - 10:24

Market recovers slightly at noon

03/10/2008 - 10:24


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Australian stocks were lower at noon, as nervous local investors await the outcome of tonight's US House of Representatives vote on a new version of the $US700 billion ($A888 billion) bailout of the financial markets.

Market recovers slightly at noon

Australian stocks were lower at noon, as nervous local investors await the outcome of tonight's US House of Representatives vote on a new version of the $US700 billion ($A888 billion) bailout of the financial markets.

At 1200 AEST, the benchmark S&P/ASX200 was down 86.3 points, or 1.81 per cent, at 4674.8, while the broader All Ordinaries had lost 94.3 points, or 1.98 per cent, to 4679.8.

At open, the indices fell over two per cent.

The December share price index futures contract had fallen 59 points at 4716, on a volume of 14,015 contracts.

Macquarie Equities associate director Lucinda Chan said the banking sector was leading the way down.

"This morning, we opened up with the banks and also the resources being very badly hit," Ms Chan said.

"I think the resources have picked up a little bit but the banks are still soft (although) they're not at their worst levels.

"Overall, the banking sector is leading the way down."

Commonwealth Bank was down 52 cents, or 1.15 per cent, to $44.88, ANZ Banking Group lost 53 cents, or 2.79 per cent, to $18.45 and National Australia Bank fell 29 cents, or 1.13 per cent, to $25.41.

Westpac shed 22 cents, or 0.94 per cent, to $23.29 and its takeover target St George Bank dropped 40 cents, or 1.30 per cent, to $30.42.

Among the miners, BHP Billiton lost $1.47, or 4.64 per cent, to $30.20, while takeover target Rio Tinto declined $4.57, or 5.01 per cent, to $86.68.

In the US overnight, the Dow plummeted 348.22 points, or 3.22 per cent, to 10,482.85, while the broader S&P500 fell 46.78 points, or 4.03 per cent, to 1,114.28.

The NASDAQ, which carries tech and more recently listed heavyweights, lost 92.68 points, or 4.48 per cent, to 1,976.72.

Ms Chan said investors were nervous ahead of tonight's US House of Representatives vote on the multi-billion dollar financial sector rescue package.

"Of course, the bailout that's to be voted upon is causing a little bit of uncertainty in the marketplace," Ms Chan said.

"That's very important. The market is probably a little bit nervous, the key being that some of the European bourses are also weaker.

"We have a double-whammy also because I think the base metal prices were particularly hard hit last night. Gold stocks also got weaker because gold prices fell away."

At 1225 AEST, spot gold was trading in Sydney at $US835.50 an ounce, down $US35.40 on yesterday's close of $US870.90.

The local gold sector fell heavily.

Newcrest Mining was down $1.32, or 4.58 per cent, at $27.53, Newmont Mining had fallen 29 cents, or 5.94 per cent, to $4.59, while Lihir Gold was 16 cents lower, or 5.78 per cent, at $2.61.

In the US overnight, light sweet crude for November delivery fell $US4.56 to settle at $93.97 a barrel on the New York Mercantile Exchange, its lowest level in two weeks.

The local energy sector was weaker.

Despite Woodside Petroleum announcing that its North West Shelf's third major offshore production facility now is operational and producing gas, shares in the company were down $1.50, or 2.91 per cent, at $49.98.

Santos dropped 97 cents, or 5.22 per cent, to $17.60 and Oil Search shed 19 cents, or 3.27 per cent, to $5.62.

The retailers were mixed.

Woolworths gained 26 cents, or 0.91 per cent, to $28.96, David Jones fell 33 cents, or 8.05 per cent, to $3.77, Pacific Brands was five cents higher, or 2.55 per cent, to $2.01, and Coles owner Wesfarmers dropped 24 cents, or 0.84 per cent, to $28.32.

In company news, AGL Energy Ltd has sold its 50 per cent shareholding in Auscom Holdings Pty Ltd (known as Elgas) to its joint venture partner in the Elgas business, BOC Limited, for $221 million.

AGL shares were up 48 cents, or 3.45 per cent, to $14.38.

The operator of the Australian Securities Exchange, ASX Ltd, has called for an indefinite ban on "naked" short selling, as part of a series of recommendations aimed at making the technique more transparent.

ASX shares were 27 cents lower, or 0.86 per cent, to $31.08.

Home builder Stockland Group has revised its guidance for fiscal 2009 following a write down of its assets in the United Kingdom.

Stockland shares were down 17 cents, or 2.93 per cent, to $5.63.

At 1249 AEST, the most traded stock by volume was Admiralty Resources, with 38.55 million units changing hands worth 1.764 million.

Admiralty shares lost 0.30 cents, or 5.77 per cent, to 4.9 cents.

Market turnover was 602.664 million shares, valued at $2.023 billion, with 240 stocks up, 678 down and 229 unchanged.


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