Local bourse set for flat open
Local bourse set for flat open

UPDATE 7.20am: The Australian sharemarket has opened flat with investors appearing cautious due to negative leads out of Europe and the US.

At 7.40am, the benchmark S&P/ASX200 index was up 2.3 points, or 0.05 per cent, at 4351.5, while the broader All Ordinaries index was up 1.5 points, or 0.03 per cent, at 4372.1.

On the ASX 24, the December share price index futures contract was up 12 points at 4363, with 9539 contracts traded.

IG Markets market strategist Stan Shamu said he thought investors were waiting for an announcement out of the US to provide more certainty about tackling its budget deficit issues, including the pending fiscal cliff.

The “cliff” refers to worries about a recession affecting the country if planned tax hikes and spending cuts come into force on January 1, which Republicans and Democrats are currently negotiating.

“Europe economic data is also showing signs of weakness and everyone is a bit scared Europe might be slipping back into recession,” he told AAP, adding there was a focus on Greece rather than creating growth on the continent.

In Australia, the local market has dropped 2.7 per cent with no real catalysts.

Financial stocks were driving the market down, with three of the four major banks suffering losses.

ANZ had shed 16 cents to $23.89, Westpac had lost 13.5 cents to $24.50 and Commonwealth Bank was 38 cents lower at $58.31. National Australia Bank was in the black, having put in 11 cents to $23.34.

Resource stocks were performing better, with mining giant BHP Billiton gaining four cents to $33.16, Rio Tinto had was up 22 cents to $57.04 while Fortescue Metals was half a cent off at $3.955.

Iluka was down six cents at $7.95, following downgrades by brokers this week, including Macquarie moving it to underperform from neutral.

Overnight, the Dow Jones Industrial Average was down 28.49 points (0.23 per cent) at 12,542.46.

The broad-market S&P 500 lost 2.16 (0.16 per cent) at 1353.33, while the tech-rich Nasdaq Composite slipped 9.87 (0.35 per cent) to 2836.94.

Europe's main stock markets retreated after news the 17-nation eurozone economy fell into recession in the third quarter as a result of the region's sovereign debt crisis.

The West Australian

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