Banks weaker in lacklustre trade
Published in the Herald Sun, June 2010 by Nicole Stevens
The Australian share market closed marginally weaker as financial and property stocks responded to a tightening of their wholesale funding costs and continuing negative news from the US housing market.
Resource stocks gained ground on an early surge, with the market assuming a new prime minister may bring some resolution to the resources super profits tax issue.
The benchmark S&P/ASX 200 index was down 6.4 points at 4479.7 while the broader All Ordinaries index fell 5.3 points to 4504.1.
On the Sydney Futures Exchange, the September futures rose six points to 4479 points, on a volume of 27,655 contracts, according to preliminary calculations.
Wealth Within senior analyst Janine Cox said negative offshore leads continued to have the most effect on the domestic bourse.
She said wholesale funding had tightened over the past few weeks, which could affect finance and property stocks.
"With the (poor) housing figures coming from the US, people need to see something positive on the horizon," she said.
Sales of new one-family homes in the United States plunged almost 33 per cent in May to a record low after the expiration of a tax break, government data showed on Wednesday.
Ms Cox said the appointment of Julia Gillard as Prime Minister added another dose of uncertainty to the Australian market.
"Until she releases her policies, it is not going to have a massive impact," Ms Cox said.
Among the big miners, Rio Tinto finished $1.19, or 1.69 per cent higher, at $71.73 and BHP Billiton was 51c higher, or 1.3 per cent, at $39.65.
The big four banks closed lower, with ANZ down 5c at $22.83, National Australia Bank 29c lower at $24.38, Commonwealth Bank was 39c weaker at $50.82 and Westpac was 44c lower at $22.12.
Investment bank Macquarie Group lost $2.02, or 4.73 per cent, to $40.65 after saying market conditions were adversely affecting activity in some of its businesses.
Rural property group Elders fell 4.5c, or 12 per cent, to a new low of 33c, after the company had earlier flagged a full-year loss, job cuts and plans to reduce costs by $45 million.
Property stocks closed lower, partially in response to negative housing figures from the US, Ms Cox said.
Goodman Group was down 2c at 66.5c, Lend Lease lost 5c to $7.45 and Stockland was off 15c at $3.78. Mirvac was 1.5c weaker at $1.38.
Ms Cox said the market needed to turn the corner in July if it was to avoid crashing through previous lows.
"If the market falls next week it's not the end of the world," she said, "but if it continues to fall into July we could take out the prior low.
"If we stay above the June low of 4325.9, it shows the market could rebound and head straight back up again."
Gold stocks rose yesterday despite the spot gold price falling.
The spot price of gold in Sydney was $US1232.96 a fine ounce, down $US7.29 from Wednesday's close.
Newcrest added 27c at $35.65, while Lihir Gold was 4c higher at $4.37.
Market turnover reached 1.86 billion shares traded for $6.25 billion, with 455 stocks up, 597 down and 402 unchanged.
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