Economic woes keep the market's brakes on
FEARS of an economic crisis in Europe and continuing debt problems in the US led the Australian sharemarket to another flat close yesterday.
FEARS of an economic crisis in Europe and continuing debt problems in the US led the Australian sharemarket to another flat close yesterday.The market followed weak leads from the US for a fourth straight day of losses.The S&P/ASX 200 Index slipped 3.9 points, or 0.09 per cent, to end the session at 4468.1.HSBC's head of sales in global markets, Ian Collins, said investors were worried that Italy, Europe's third-largest economy, might become the latest country to be caught up in the region's debt woes.Mr Collins said a collapse in the Italian economy could have a far greater effect on the Australian market than a loan default by Greece.Mr Collins said positive earnings results in the US corporate reporting season, now under way, might not be enough to lift investors' confidence.US President Barack Obama has yet to reach an agreement with Republicans to raise the US debt limit by August 2 before it runs out of money.Mr Collins said the US would need to resolve its debt-ceiling negotiations before investors regained confidence. "I don't believe the market is going to latch on to any major positive news until that is out of the road."CommSec market analyst Juliette Saly said global economic factors were putting pressure on banking stocks around the world. "Banking stocks have been under the most pressure in offshore markets," she said.The financial sector was one of the worst performers on the Australian market, closing 0.5 per cent lower.Two of the big four banks lost ground. Westpac eased 5? to $20.68 and Commonwealth fell 34? to $48.55. ANZ edged up 2? to $20.77 and NAB gained 16? to $23.67.Countering the weakness in financials, the energy, telecommunications and consumer discretionary sectors each rose almost1 per cent.Woodside Petroleum reported a rise in June-quarter revenue due to stronger commodity prices. Its shares gained 67?, or1.8 per cent, to $38.92.Among the big miners, BHP Billiton was down 23? to $42.62 and Rio Tinto lost 27? to $81.33.Tabcorp was the best performers in the top 100 after it paid $410 million for the rights to operateoff-course betting in Victoria for the next 12 years.Tabcorp rose 16?, or5.2 per cent, to $3.26 while rival Tatts Group was up 1? at $2.33.Gold closed at $US1607.07 an ounce, up $US8.15. Goldminer Newcrest gained 32? to $40.73.