Share advance falters after Obamas speech
Published in the Canberra Times, September 2011 by Jane Lee
The Australian sharemarket closed slightly higher yesterday, led by consumer staples and telecom stocks, but shed sonic of its earlier gains as traders took a wait-and-see approach to the US debt crisis.
The benchmark S&P/ASX200 index was up 6.7 points, or 0.16 per cent, at 4194.7 points, while the broader All Ordinaries index rose 7.6 points, or 0.18 per cent, to 4277.4 points.
On the ASX 24, the September share price index futures contract lost five points at 4182 points on volume of 41,394 contracts.
The local bourse opened slightly higher, despite a weak lead from Wall Street, after US President Barack Obama introduced a highly anticipated $US447 billion ($A423.06 billion) plan to Congress that he said would jolt the stalled economy and create more jobs.
Wilson HTM head of wealth management Andrew Coppin said investors were wary of whether Mr Obama's American Jobs Act would pass in Congress, and were awaiting Wall Street's response to the plan when United States markets re-opened on Monday.
"Counterbalancing that, there are still significant issues about European debt.
We've got a G7 (Group of Seven nations) conference in France today and tomorrow ...
So, people will be looking to see what response comes out of Europe," he said. But shares drifted slightly lower in afternoon trade.
Wealth Within analyst Janine Cox said the market was highly reactive to news from the US, with investors taking a wait-and-see approach.
"I think everybody's waiting for Obama to come out and talk about what he's going to do because the market has been hanging on to hope that [Federal Reserve Chairman Ben] Bernanke might come out with a QE3 package."
Gold stocks made major moves, with Australia's biggest gold miner Newcrest Mining up 31c at $39.86.
Perseus Mining was also trading 11c, or 2.8 per cent, higher at $4.00, with OceanaGold Corp rising 14c, or 5.9 per cent, to $2.52.
Local players also poured money into consumer staples, with the sector trading 0.57 per cent higher.
Goodman Fielder, owner of grocery brands such as Wonder White and Helga's bread, was the top performing stock in the ASX 100, rising 5.6 per cent, or 3.5c, to 66.5c.
Telecoms closed up 7 per cent, with Telstra shares 2c higher to $3.04. Health care and energy stocks fell in afternoon trade, closing down 0.21 and 0.27 per cent respectively.
The financials finished the day 0.19 per cent higher. Westpac shares rose 4c to $20.13 after it was named the world's best bank for corporate sustainability in 2011-12 by Dow Jones Indexes and Swiss investment boutique SAM.
Rio Tinto fell 5c to $71.25 after announcing it would invest $US310 million in a Pilbara coastal water project.
Fellow miner BHP Billiton fell 26c to $37.91.
The closing price of gold in Sydney was $US1873.00 per fine ounce, up $US27.60 from Thursday's local close at $US1845.40.
National turnover was 2.13 billion securities changing hands for $4.21 billion, with 618 stocks up, 423 down and 346 steady.
The Australian dollar was higher last night, trading at US106.28c, up US0.25c from 105.96c on Thursday.
CMC Markets senior FX dealer Tim Waterer said the response to the US President's speech was indecisive.
"Whilst Obama's speech may have brought a standing ovation on Capitol Hill, the jobs plan did not exactly receive the same rousing reception from financial markets," he said, adding the Dow Jones moved "all over the place" during Mr Obama's speech.
Mr Waterer said there wasn't much of a reaction in currencies to the publication of Chinese August inflation figures, which came in pretty much as expected.
"That had the potential to cause a stir in markets if it came in on the high side of expectations, but it didn't cause much concern," he said.
The Reserve's trade weighted index was at 76.7, up from 76.4 on Thursday.
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