Stock market firmly in the red

Published by AAP Newswire, November 2010

Sydney, Nov 17 AAP - The Australian sharemarket was firmly in the red at midday with losses in all sectors, following falls on overseas markets overnight.

At 1215 AEDT, the benchmark S&P/ASX200 index was down 69.6 points, or 1.48 per cent, at 4,630.6, while the broader All Ordinaries index was down 70.9 points, or 1.48 per cent, at 4,711.9.

On the ASX 24, the December share price index futures contract was 68 points lower at 4,645 points, with 24,615 contracts traded.

Wall Street and European stocks fell sharply overnight on growing unease over Europe's massive sovereign debt and China's efforts to tackle rising inflation.

The Dow Jones Industrial Average dropped 178.47 points, or 1.59 per cent, to 11,023.5. The Standard & Poor's 500 index shed 1.62 per cent to 1,178.34 and the Nasdaq fell by 1.75 per cent to 2,469.84.

Locally, the hardest hit sector was resources, with many smaller companies posting losses of around five per cent.

The major mining stocks were lower, too, with BHP Billiton down 88 cents, or 1.98 per cent, at $43.57, and Rio Tinto was down $2.52, or 2.92 per cent, at $83.92.

Among the four major banks, Westpac Banking Corporation had lost 37 cents, or 1.67 per cent, at $21.83, ANZ was down 35 cents, or 1.51 per cent, at $22.87, NAB fell 25 cents, or one per cent, to $24.53, while Commonwealth Bank suffered least, down 18 cents at $49.71.

An analyst at Wealth Within, Janine Cox, said the falls were unsurprising as the market was due to pull back after recent strong trade.

"We expected we would get two weeks down on the market, and it is looking like it is happening now," Ms Cox said.

"I think our market is quite strong and is just doing its thing."

Ms Cox said the downward run would not last long and she expected the market to break through 5,000 points over the festive season.

"The market has been like a steam train over recent weeks," she said.

"It is not going to stop and do an about face. Even with the news about China, the Chinese economy is not going to slow down overnight.

"The Government has put the brakes on to prevent it overheating."

At 1245 AEDT, among the ASX 200, only 11 stocks were trading higher at noon on Wednesday.

The bright spots included Ausenco Ltd, up 36 cents, or 14.46 per cent, at $2.85 on news it has returned to growth, with a profit expected in the second half of 2010.

Macarthur Coal was three cents higher at $11.43 after forecasting first half profit in fiscal 2011 to be strongly up on a year earlier, on the back of demand growth and a tightening market.

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