European swings leave market on edge
MARKET watchers were kept on edge this week by political news from Europe, where French and Greek voters took a left turn towards parties that opposed the region's harsh austerity policies.
MARKET watchers were kept on edge this week by political news from Europe, where French and Greek voters took a left turn towards parties that opposed the region's harsh austerity policies.By late yesterday, after poor Chinese industrial production data, the gloomy mood had pulled the dollar towards parity with the greenback, the lowest it had been since December.Currency strategists said the dollar would likely slip below parity overnight, as fears about the political situation in Greece continued to weigh on global markets.For the week, the benchmark S&P/ASX 200 Index shed 113.4 points, or 2.6 per cent, to 4282.6.The sharemarket suffered its biggest one-day fall for the year on Monday, losing 2.15 per cent as investors responded to weak US employment data and the results of the elections in France and Greece.Trading yesterday started weakly after JPMorgan Chase admitted it had lost $A1.99 billion in the past six weeks by trading complex financial instruments in a "flawed" hedging operation.The company's stock fell almost 7 per cent in after-hours trading in the US on the news.Among the big banks, ANZ was 11? lower at $22.04 after it became the last of the big four banks to pass on some of the Reserve Bank's interest rate cut.NAB dipped 2? to $24.55, Westpac shed 18? to $22.72 and Commonwealth Bank eased 10? to $51.80.Further unsettling news from the eurozone during the week stirred fears about global growth, which in turn hit local resource and energy stocks. Global miner BHP Billiton yesterday slipped 25? to $34.37 and Rio Tinto fell 87? to $61.07.Despite the gloomy mood, some fund managers welcomed the pessimism, because it gave them the opportunity to buy quality stocks at a discount."I've never seen the average investor as negative as he is now, which I think is a very good thing," said Allan Gray Australia executive director Simon Marais."Once all the money's out of the market it can only come back in . . . when everybody's gloomy and nobody is interested in the market, that's normally where the actual risk is pretty low."Telstra shed 4? to $3.60.Among other stocks, law company Slater & Gordon was 3? lighter at $1.75 after it said it would book a $10 million write-down as a result of the High Court deciding not to grant its client leave to appeal a full Federal Court decision in the Vioxx class action.Trans-Tasman casino operator SkyCity Entertainment Group sagged 12? to $2.90 after it downgraded its profit expectations following weaker trading conditions, especially in Adelaide.Garage doors and construction products supplier Alesco eased 1? to $2.06 after it again urged its shareholders to take no action on the $188 million takeover offer from Dulux Group.