Australian stock market slips on risk worries
Sat Jun 5 2010
THE Australian sharemarket was weighed down by position squaring in the heavyweight materials and financials sectors yesterday, after their US peers lost ground and major US stock indices failed to break through an important resistance level.
Market participants were awaiting US non-farm payrolls data, due overnight. The focus was also on a meeting of G20 finance ministers in South Korea, where the European debt crisis was dominating discussion.
The benchmark S&P/ASX 200 closed down 36.6 points, or 0.8 per cent, at 4449.4, after hitting an intraday low of 4430.7. The broader All Ordinaries index closed down 33.8 points at 4472.4 points.
The S&P/ASX 200 index fell 0.2 per cent over the week, after rising 3.5 per cent the previous week. Share trading volume was light before the weekend, with traders mostly squaring long positions and investors reluctant to buy after a disappointing night on Wall Street.
Major banks fell 0.5 per cent to 2.9 per cent, with National Australia Bank trading ex-dividend.
Defensives mostly outperformed, with CSL up 2.8 per cent to $32.82 and Telstra up 1c at $3.10.
Coca-Cola finished up 20c, or 1.81 per cent, at $11.25 and Foster's was 6c firmer at $5.65.
Healthcare stocks were a standout, with ResMed and Ramsay Health Care hitting all-time highs this week. ResMed closed 13c higher at $7.83 yesterday, while Ramsay added 2c to $14.52.
"People need to spend on their health and food regardless," City Index market strategist Michael McCarthy said.
Among key retailers, Woolworths was down 27c at $27.01 and Coles owner Wesfarmers slipped 32c to $29.09. Overnight on Thursday, the S&P 500 rose 0.4 per cent, stringing together its first two-day gain in six weeks.
But despite expectations of a strong US employment report, the S&P 500 was unable to break nearby chart resistance from its 200-day moving average.
It has been seven weeks since the US sharemarket rose three days in a row and eight weeks since the Australian sharemarket has risen three days in a row.
"We had a very strong rally on light volume on Thursday, yet the overnight lead wasn't great from Wall Street, particularly in materials and financials," said Chris Weston, institutional dealer at IG Markets. "Non-farm payrolls will be hugely important. But investors are hesitant because of downside risks to Chinese economic growth," Mr Weston said.
In the energy sector, Woodside shares were down 21c at $43.99, Santos shares were up 22c at $12.92 and Oil Search eased 3c to $5.66.
DOW JONES NEWSWIRES: ADDITIONAL REPORTING AAP
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