Fed uncertainty drags on market but Chinese output a fillip
Australian shares opened 1 per cent lower after a US Federal Reserve official said tapering of economic stimulus could begin in October.
But IG market strategist Chris Weston said the market managed to pare back some early losses in afternoon trade. "More positive action from China has put an upside on some of the materials and energy plays," he said.
"The Chinese equity market is up more than 1 per cent and the HSBC number added further evidence that at least in the short term Chinese growth is firmly stabilising."
China's manufacturing activity expanded in September to a six-month high, a further sign that a rebound in the world's second-largest economy is gaining momentum on improving demand.
It came after St Louis Fed president James Bullard's comments weighed on investor sentiment, only days after US Fed chairman Ben Bernanke had suggested that quantitative easing would continue.
Uncertainty about a US congressional deadlock on raising the debt ceiling also weighed on resources stocks. Mining giant BHP Billiton was down 29¢ to $36.10, Rio Tinto fell 34¢ to $62.57, Fortescue rose 3¢ to $4.59 and goldminer Newcrest was down $1.07, or 8.1 per cent, at $12.03.
The chief executive of Treasury Wine Estates, David Dearie, has resigned immediately after just two years in the job. The company's shares fell 30¢, or 6.3 per cent, to $4.45 on Monday.
Perseus shares were down 10¢, or 15 per cent, at 57¢ after two of the company's founding directors said they would leave in November.
The big banks were mixed, with ANZ adding 10¢ to $31.19 and Westpac adding 5¢ to $32.80, but National Australia Bank was down 3¢ to $34.83, and Commonwealth Bank shed 24¢ to $73.51.
At the close, the benchmark S&P/ASX 200 index was 24.2 points, or 0.46 per cent, lower at 5252.5. The broader All Ordinaries index was down 25 points, or 0.47 per cent, at 5245.8.
The December share price index futures contract was nine points lower at 5260.
The spot price of gold in Sydney was $US1326.07 per fine ounce, down $US35.83 on Friday's closing price of $US1361.90.
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Australian shares opened about 1% lower after a US Federal Reserve official said tapering of economic stimulus could begin in October. Investor sentiment was also dented by St Louis Fed president James Bullard’s comments and uncertainty over a US congressional deadlock on the debt ceiling. Stronger Chinese data later helped pare some losses, especially in materials and energy stocks.
China’s manufacturing activity expanded in September to a six‑month high and the HSBC reading showed signs that Chinese growth was stabilising. That positive news pushed Chinese equities up more than 1% and put upside pressure on Australian materials and energy plays, helping the market recover some early losses.
Mining stocks were mixed: BHP Billiton fell 29¢ to $36.10, Rio Tinto dropped 34¢ to $62.57, Fortescue rose 3¢ to $4.59, and Newcrest slid $1.07 (down 8.1%) to $12.03 on the day.
Treasury Wine Estates’ chief executive David Dearie resigned immediately after two years in the role. The announcement weighed on the stock, which fell 30¢ or 6.3% to $4.45.
Perseus shares fell after two of the company’s founding directors said they would leave in November. The stock was down 10¢ or about 15% to 57¢ following that news.
Bank stocks were mixed: ANZ added 10¢ to $31.19 and Westpac gained 5¢ to $32.80, while National Australia Bank was down 3¢ to $34.83 and Commonwealth Bank slid 24¢ to $73.51.
At the close the S&P/ASX 200 index was down 24.2 points, or 0.46%, at 5252.5. The All Ordinaries fell 25 points, or 0.47%, to 5245.8. The December share price index futures contract was nine points lower at 5260.
The spot price of gold in Sydney was $US1326.07 per fine ounce, down $US35.83 from Friday’s closing price of $US1361.90.
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