Market slides into the red mid-session
Market slides into the red mid-session

The Australian sharemarket is trading lower after investors felt some disappointment over the latest moves by the US central bank to boost the US economy.

The US Federal Reserve has extended a program that aims to encourage borrowing and spending by reducing long-term interest rates as it cut its forecast for US growth.

But the Fed has said it was prepared to take more action if needed.

At 10am, the benchmark S&P/ASX200 index was down 22.7 points, or 0.55 per cent, at 4109.7 points, while the broader All Ordinaries index fell 21.9 points, or 0.52 per cent, to 4154.9 points.

On the ASX 24, the June share price index futures contract, which expired at 10am, was up 13 points at 4142 with 10,974 contracts traded.

The September share price index futures contract was down 27 points at 4066 points, 18,889 contracts traded.

OptionsXpress market analyst Ben Le Brun said investors were trying to make up their minds on what the latest Federal Reserve stimulus package meant for the US.

"There might be some slightly disappointed investors and traders as well," Mr Le Brun said.

Mr Le Brun noted that the Federal Reserve had said that it stood ready to do more should economic conditions warrant it.

"US markets are only four per cent off their 2012 highs at the moment, so that in itself tells you that conditions aren't quite right for a full-blown package," Mr Le Brun said.

On the local bourse, in the resources sector, global miner BHP Billiton lost 22 cents to $32.38, and Rio Tinto eased six cents to $57.66.

Among the major banks, ANZ was eight cents lower at $21.67, National Australia Bank reversed 18 cents to $23.27, Westpac dipped six cents to $21.14, and Commonwealth Bank slipped five cents to $52.04.

Surfwear company Billabong was in a trading halt as it launched a $225 million fund raising venture it says is vital for its future. Billabong last traded at $1.83.

Toy distributor Funtastic was also in a trading halt after it said it has raised up to $24.6 million to reduce bank debt and improve its gearing ratios. Funtastic last traded at 16 cents.

National turnover at 10.11am was 1.04 billion shares worth $4.07 billion, with 470 stocks down, 313 up and 352 unchanged.

On Wall Street, the Dow Jones Industrial Average closed 12.94 points, or 0.10 per cent, lower at 12,824.39 points.

The West Australian

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