New PM lifts miners but index still falls

Published in The Age, June 2010 by Jared Lynch

Not even a strong rally in index heavyweights, the mining stocks, could stop the sharemarket from falling into the red for a third day.

Lagging financial stocks weighed down the S&P/ASX 200 Index, which closed with a loss of 6.4 points, or 0.14 per cent, at 4479.7.

IG Markets strategist Ben Potter said the Macquarie Group perturbed investors when it said market conditions were increasingly uncertain and adversely affecting some business activity.

"The market certainly didn't like the wording, with the big four banks all finishing in the red," Mr Potter said. "They were down 0.2 per cent and 2 per cent, with Westpac the worst."

Macquarie lost $2.02, or 4.7 per cent, to $40.65 after. Separately, Andrew Low, Macquarie Capital's chief operating officer and global co-head of financial institutions group, resigned on Wednesday.

The financial sector closed 1.17 per cent lower. ANZ was 5c down at $22.83, NAB 29c lower at $24.38, Commonwealth 39c weaker at $50.82 and Westpac shed 44c to $22.12.

Wealth Within senior analyst Janine Cox said Julia Gillard's election as Prime Minister added another dose of uncertainty.

"Until she releases her policies, it is not going to have a massive impact," she said. "It is likely that what is going on overseas will have the most impact. With the (poor) housing figures corning from the US, people need to see something positive on the horizon."

Property stocks closed lower, partially in response to negative housing figures from the US, said Wealth Within senior analyst Janine Cox. Wholesale funding had tightened up over the past few weeks, she said, which could also affect finance and property stocks.

Mining shares were stronger, pushing the materials sector up 1.07 per cent. Rio Tinto finished $1.19 higher, or 1.7 per cent, at $71.73 and BHP Billiton was 51c firmer, or 1.3 per cent, at $39.65.

Rural property group Elders fell 4.5c, or 12 per cent, to a new low of 33c.

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