Market grinds out timid rebound
The Australian sharemarket ground out a timid rebound following a jump in October consumer confidence and reports Greece had scraped together enough cash to meet bond redemptions this week.
Trade volume was low across Asian markets following another losing session on Wall Street last night, and the S&P/ASX 200 index closed 8.6 points, or 0.2 per cent, up at 4388.4 points.
Weighing against the 5.2 per cent climb in the Westpac Melbourne Institute consumer confidence index was the weaker than expected 3.7 per cent annual rate of increase of the wage index, with the last two quarters running at an annualised rate of 3.4 per cent.
The wage data swung the pendulum in favour of a rate cut in December, but was trumped by the consumer confidence data in currency markets where the Australian dollar climbed $US0.3¢ to $US1.0450.
The Shanghai composite index was off 0.1per cent at the close of the ASX as the ruling party’s leadership confidence drew to a close without generating any “exciting news” to stimulate the economy.
Japan’s Nikkei index was flat.
Last night the S&P 500 index finished a roller coaster session 0.4 per cent down despite further signs of compromise in US budget talks and that Germany was loosening its squeeze on Greece’s funding.
Early US optimism was driven by Home Depot which hit a 12-year high after raising its 2012 forecast on an optimistic outlook for the housing market.
Although Greece is expected to get approval for the release of 31.5 billion euro in funding within the next two weeks, analysts sounded a note of caution over the “obvious rift” between the IMF and Jean-Claude Junker, chairman of the Eurogroup ministers dealing with Greece’s bailout.
Gold edged up $US3 to $US1728 an ounce, with Deutsche Bank global head of metals trading Raymond Key forecasting a rise to $US2000/oz next year on expectations authorities would again resort to “money printing” to revive sagging global growth.
Copper dropped 0.6 per cent to $US7633 a tonne and aluminium fell 0.4 per cent to $US1976 a tone on reports China would rather stockpile metals than shutdown loss making refineries.
The broader All Ordinaries index was up 6.5 points, or 0.15 per cent, at 4,410.7. On the ASX 24, the December share price index futures contract was five points higher at 4,394, with 27,397 contracts traded.
CMC Markets senior trader Tim Waterer said investors appeared unwilling to venture into risk assets, hence the falls in resources stocks offsetting solid gains made by Australia’s major banks.
The spectre of the “fiscal cliff” in the US was capturing market attention and inhibiting the likelihood of investors to venture into risk assets, he told AAP.
“The focal point for investors at the moment is rhetoric coming from Washington regarding the fiscal cliff and that’s going to be a central theme in financial markets for the rest of the year until a deal is done,” he said.
Global insurer QBE was the best performer among the top 20 ASX companies, gaining 2.4 per cent to $11.18 but it recovered less than a third of Tuesday’s heavy losses following an earnings downgrade.
Financial services conglomerate Suncorp added 14 cents, or 1.5 per cent, to $9.48.
The four major banks also all posted gains.
ANZ gained 15 cents to $24.20, Commonwealth Bank was 39 cents better at $59.09, Westpac jumped five cents to $24.85 and National Australia Bank improved 13 cents to $23.24.
Far more stocks lost ground today, with 374 stocks up, 526 down and 380 unchanged and national turnover of 1.3 billion securities worth $3.32 billion.
The mining and energy sectors were down, with the majors having mixed days.
BHP Billiton lost two cents to $33.73, Rio Tinto gained 18 cents to $57.85 and Fortescue was three cents higher at $4.
Woodside Petroleum shed seven cents to $33.79 and Santos fell 27 cents, or 2.5 per cent, to $10.52, representing a 12.3 per cent fall in the last four weeks.
