Bucking a negative Wall St


Published in the Daily Telegraph, February 2010

The Australian sharemarket may buck a negative lead from Wall Street and rise today, an economist said.

On Wall Street on Friday news that China plans to force its banks to reduce their lending sent shares mainly lower.

The Dow Jones Industrial Average lost 45 points, or 0.4 per cent, to end the week at 10,099.14 points while the S&P 500 index slid 3 points, or 0.3 per cent, to close at 1,075.51.

The tech-heavy Nasdaq Composite index rose 6 points, or 0.3 per cent, to finish at 2,183.53.

On the local market on Friday, the All Ords finished up 13 points to close the week at 4588.8 points while the S&P200 finished up 7.8 points, closing the week at 4562.1 points.

On Friday the price of oil and gold were down, with a mixed performance in base metals.

The futures market indicated that the local market would fall 18 points at the start of trade.

But CommSec chief economist Craig James said the local market might shrug off Wall Street's fears, and move higher in early trade.

"Char investors will be considering the tightening of China's bank lending policy as a very positive thing," Mr James said.

We could end up bucking the trend and actually moving higher on Monday, with a number of bargain hunters continuing to come in, embracing the fact that out, economy is continuing to perform strongly."

Wealth Within Chief Analyst Dale Gillham said he believed the market's move down was a migration to its annual low.

“Has the fall stopped and is it time to buy again? It is quite possible, given the market appears to have found support around the all important 4500 point level, as evidenced by the fact that although falling slightly below that level on Tuesday it closed above it and has since rebounded near 100 points," Mr Gillham said.

"That said it is too early to tell whether the market has stopped falling, therefore we need to assume a further move down is possible to around 4300 points."


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