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ASX Market Wrap - 24th May 2013
24-May: Australian shares reversed early gains to post another big sell-off as faltering banks and market volatility around the region hit investor sentiment.
The benchmark S&P/ASX200 index fell 76.5 points, or 1.5 per cent, to 4964.3, ending below 5000 points for the first time since April 22. The broader All Ords slumped 78.9 points, or 1.6 per cent, to 4983.5.
The value of trades was $6.2 billion on volume of 1.1 billion shares at the close of trade.
The ASX shed 3.8 per cent over the week, its biggest weekly loss in 18 months.
Today's drop wiped another $23 billion off the market's value, adding to yesterday's $30 billion drop.
Australia’s four largest banks dropped between 1 and 2 per cent - ANZ slumped 45 cents to $27.68, Commonwealth Bank was off 94 cents at $68.77, National Australia Bank backpedalled 41 cents to $31.29 and Westpac was 60 cents lower at $29.32.
Telstra was down 8 cents, or 1.6 per cent, at $4.87.
Among the major miners, BHP-Billiton declined 52 cents, or 1.5 per cent, to $34.36 and Rio Tinto was 59 cents, or 1.6 per cent, lower at $54.51.
The gold sector, rose 3.4 per cent as a firmer US dollar boosted the price of gold.
Newcrest Mining gained 57 cents to $15.12, and Kingsgate Consolidated advanced 12.5 cents to $1.55.
In company news, shares in Echo Entertainment Group Limited hit a record low after James Packer’s Crown Limited offloaded its 10 per cent stake in the gaming company. Mr Packer’s decision to sell Echo shows his confidence Crown’s proposed $1 billion development of a six-star hotel and casino at Barangaroo in Sydney will be approved.
Australian Agricultural Company Limited has revealed its second major Queensland divestment this week after booking a quarterly net loss of $46.5 million on the back of lower cattle prices. Australia’s biggest beef cattle producer today announced it will sell its Brighton Downs Station for almost $12 million and announced earlier this week it will sell subdivisions of its Goonoo Aggregation for $23 million.
Shares in Oil Search Limited bucked a negative trend in the energy sector and added 0.87 per cent to hit a new high amid takeover speculation. The oil and gas producer has been at the centre of reports suggesting it is poised to attract a bid ahead of its PNG LNG project starting up in 2014.
Gold is trading at $US1,389 an ounce, up $5.80 over the week.
Light crude is $0.34 lower at $US93.91 a barrel.
The Australian dollar is buying 96.77 US cents, down $0.007 over the week.
Morning Market Mood: 24th May, 2013
Despite 'mini-meltdowns' in Asia and Europe, Australian shares are likely to open higher today and recoup some of yesterday’s losses after the US bounced back from an early pluge following the release of some positive economic data. On the ASX this morning, the SPI futures contract was up 16 points to 5, 086 while the AUD is buying 97.6 US cents, up from an intra-day low of 95.93.
Asia’s Nikkei plummeted 7.32% during trade yesterday which sent other Asian markets and European markets into a bit of a spiral. The US was heading that way but was saved by strong housing and job benefits figures that were released later in the day. The S&P 500 cut its loss back to 0.26% to sit at 1,651 while the Dow dipped a minor 0.08% after huge gains in Hewlett-Packard. The Nasdaq fell 0.12%.
In Europe, some positive news out of Britain and the manufacturing market wasn’t enough for investors to shrug off amid the Chinese crash and the lingering concern that US Fed’s will cut stimulus measures. All but 26 of the 600 gauges in the Stoxx 600 fell overnight as it totaled a drop of 7 points, or 2.12%, to close the session at 304. In London, concerns that Chinese manufacturing is shrinking overpowered the data that indicated that the U.K’s economy is growing and consumer spending is increasing. The FTSE fell 143 points, or 2.09%, to sit at 6, 697. Germany’s DAX fell 2.10% while France’s CAC fell 2.08%.
In mining, BHP and Rio Tinto fell in overnight trade following concerns on Chinese demand. Rio gave up 1.56% while BHP dipped 1.19%. The price is China’s iron ore was flat at US$123.20/Mt.
In the commodity market, a weak Chinese manufacturing report raised concerns on the world’s second largest economy and its ability to sustain adequate orders. US copper for July delivery was recently down 6 cents, or 1.8%, at US$3.32 a pound. In London, copper sagged 2.4%, aluminium 1.85%, lead 0.6%, nickel 1.5%, tin 2.4% and zinc 1.3%.
Gold prices benefited from the increased global concern following China’s sudden plunge. Gold futures for June delivery was recently ahead by $22, or 1.6%, at US$1,389.40 an ounce- its highest price in a week after consumer confidence in the global economy sank. Silver futures for July delivery rose 0.2 percent to $22.508 an ounce in New York after dropping as much as 2.5% during trade.
West Texas Intermediate faced early declines amid the widespread economic concern but was able to compensate the losses by the end of the session as some positive US data hit the market. Crude for July delivery was recently edging in front by 11 cents, or 0.1%, at US$94.38.
There is no major economic news scheduled in Australia today, however Invocare and Syrah Resources are hosting annual general meetings. The Governor of the Bank of Japan is expected to deliver a speech just after lunch today which, given the recent circumstances, will more than likely capture the attention of more than just a few investors. In Europe, the German LFO Business Climate report is due while in the US, durable goods orders/core durable goods are ‘good’ to go!
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