ASX defies lead to close firmer
The Australian sharemarket shrugged off weakness on Wall Street last night and rising tensions in Ukraine as it edged to a fresh six-year high on a surge in volume.
With no news flow to knock buying momentum the S&P/ASX 200 index climbed 0.4 per cent at the open before volume dried up and it slipped back to close 13 points, or 0.24 per cent, at 5531 as profit taking set in ahead of the long weekend.
Last night the US S&P 500 index broke its five-day winning streak with a 0.3 per cent drop following a round of soft data that undermined the bullish growth outlook.
Compounding the weakness reflect in existing home sales, US new home sales slumped 14.5 per cent in March, with all the weakness in states least affected by the severely cold winter.
Mortgage applications fell 3.3 per cent against expectations for a 4.3 per cent increase, while the US PMI manufacturing index also slipped to 55.4 points from 56, dashing hopes for a strong winter weather rebound.
The Australian dollar was slightly firmer at US92.90¢ and government 10-year bond yields were little changed at 3.956 per cent as investors digested the benign inflation data out yesterday.
"Prospects for rate hikes later in 2014 have taken a significant nose dive with this inflation report," Westpac chief economist Bill Evans said. "However, given the more encouraging domestic data on consumer spending, housing and employment the RBA will not restore its easing bias."
The Shanghai composite index was off 0.4 per cent at the close of the ASX as the lack of stimulus news and buying dilution from the wave of initial public offerings hitting the market.
The Chinese yuan was trading at 16-month lows, fanning fears further weakness could trigger stop loss selling and deter capital inflows in to the world's second biggest economy.
In Tokyo the Nikkei index was off one per cent.
Gold was steady at $US1286 an ounce, copper rose 0.3 per cent to $US6678 a tonne and spot iron ore lost o.3 per cent to $US112.20 a tonne yesterday.
More to come…
