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 finished lower after comments from a US Fed official about possible tapering and concerns about a US congressional deadlock on the debt ceiling weighed on sentiment. Strong Chinese manufacturing data helped pare some losses by supporting materials and energy stocks, but overall caution kept the market down.
China’s manufacturing activity expanded to a six-month high in September and the HSBC data showed Chinese growth stabilising. That positive action boosted Chinese equities and put upside pressure on some Australian materials and energy plays, helping to reduce early market losses.
On the day reported, BHP Billiton fell 29¢ to $36.10, Rio Tinto dropped 34¢ to $62.57, Fortescue rose 3¢ to $4.59, and goldminer Newcrest slid $1.07 (about 8.1%) to $12.03.
The big banks were mixed: ANZ added 10¢ to $31.19 and Westpac gained 5¢ to $32.80, while National Australia Bank fell 3¢ to $34.83 and Commonwealth Bank shed 24¢ to $73.51.
Treasury Wine Estates’ chief executive David Dearie resigned immediately after two years in the role. The company’s shares fell 30¢, or about 6.3%, to $4.45 following the resignation.
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¢ on that news.
At the close the S&P/ASX 200 was down 24.2 points (0.46%) at 5252.5 and the All Ordinaries was down 25 points (0.47%) at 5245.8. The December share price index futures contract was nine points lower at 5260, reflecting overall market caution.
The spot price of gold in Sydney was US$1,326.07 per fine ounce, down US$35.83 from Friday’s closing price of US$1,361.90.
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