THE sharemarket has pushed up off mid-afternoon lows to finish marginally higher as investors await the outcome of hurricane Sandy on the US east coast.
The benchmark S&P/ASX 200 Index inched up 8.8 points, or 0.2 per cent, to 4485.7.
Among the major sectors, financials added 0.3 per cent, materials gained 0.1 per cent, while energy stocks slipped 0.1 per cent.
The New York Stock Exchange was closed overnight and will probably remain closed for at least another day. As a result, local investors erred on the side of caution, with trading volumes on the ASX 200 well below average.
"It's going to be very hard for people to trade aggressively when the world's No.1 economy is closed [apart from futures]. Profit results are still being reported, but there were no major companies reporting last night," said Tony Farnham, a strategist at Patersons Securities.
The US December-quarter GDP figure would likely be affected by hurricane Sandy, Mr Farnham said, simply because of the sheer number of people affected by the storm.
"From a calendar 2013 perspective, depending on the extent of the damage, construction will add to GDP," said Mr Farnham.
Local insurance stocks have already started wavering in expectation of US claims. QBE slipped 1.3 per cent to $13.02, IAG dropped 0.4 per cent to $4.54 and Suncorp fell 2 per cent to $9.30.
Commonwealth Bank held its annual meeting on Tuesday. Although chairman David Turner said the bank expected demand for credit to remain low, investors were confident with the bank's outlook.
"[CBA] seems to have passed that one with flying colours, there were no nasty surprises and, as a result, it was up around 50?, a reasonable result for a major bank on the back of an AGM," said Mr Farnham.
CBA finished up 52? at $57.31. National Australia Bank reports its full-year earnings on Wednesday. NAB recently issued a market update saying it had increased provisions to cover losses from bad debts, mainly in Britain. NAB shares were flat at $25.88.
Among the other big banks, ANZ added 15?, or 0.6 per cent, to $25.38, while Westpac gained 9?, or 0.4 per cent, to $25.34.
Mr Farnham said China's purchasing managers' index, due out on Thursday, would be playing on investors' minds.
"The [Chinese Communist Party] leadership has hinted that while things are not going to take off again, they're not going to madly splurge like they did post financial crisis, and that they've got enough momentum at this stage to deliver the soft landing that everyone is hoping is going to unfold," said Mr Farnham.
Frequently Asked Questions about this Article…
How did the ASX 200 perform as investors awaited the outcome of Hurricane Sandy?
The S&P/ASX 200 finished marginally higher, up 8.8 points (around 0.2%) to 4485.7 as investors awaited Hurricane Sandy's outcome, but trading volumes were well below average due to caution and the U.S. market closure.
Why were trading volumes on the ASX low while Hurricane Sandy hit the US east coast?
The New York Stock Exchange was closed and likely to remain shut for at least another day, which made local investors cautious—Tony Farnham noted it’s hard to trade aggressively when the world’s largest economy is closed, so ASX volumes fell below normal levels.
Which sectors moved on the day and how did they perform?
Major sector moves were modest: financials added about 0.3%, materials gained roughly 0.1%, and energy stocks slipped about 0.1% as investors took a cautious stance ahead of U.S. developments.
How did major Australian banks fare amid the market caution and company news?
Commonwealth Bank (CBA) rose after its annual meeting and finished up about 52 cents at $57.31; NAB was flat at $25.88 ahead of full-year results and after increasing provisions; ANZ rose roughly 15 cents to $25.38 and Westpac gained about 9 cents to $25.34.
What happened to Australian insurance stocks as Hurricane Sandy unfolded?
Local insurers slipped on expectations of U.S. claims: QBE fell about 1.3% to $13.02, IAG dropped around 0.4% to $4.54 and Suncorp declined roughly 2% to $9.30.
Could Hurricane Sandy affect U.S. GDP and what did analysts say about possible impacts?
Analysts said the U.S. December-quarter GDP was likely to be affected because of the large number of people impacted by the storm; depending on damage, subsequent reconstruction activity could add to GDP in calendar 2013.
What upcoming economic data were investors watching that could influence markets?
Investors were watching China’s manufacturing purchasing managers’ index (PMI), due out on Thursday, with commentary noting Chinese leadership aims for a soft landing rather than aggressive stimulus—making the PMI an important near-term data point.
What does low-volume trading and a closed U.S. market mean for everyday investors?
Low volumes and U.S. market closures tend to make markets more cautious and can reduce liquidity, so the article highlights investors’ reluctance to trade aggressively under those conditions while earnings and other reports continue to roll in.
Call 1300 880 160
Start a chat
Schedule a call
