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 waited for the outcome of Hurricane Sandy?
The ASX 200 finished marginally higher, up 8.8 points or 0.2% to 4,485.7, after pushing up off mid-afternoon lows as investors awaited the impact of Hurricane Sandy on US markets and the economy.
Why were trading volumes on the ASX 200 well below average during the Sandy period?
Trading volumes were below average because the New York Stock Exchange was closed overnight (and likely to remain closed), prompting local investors to err on the side of caution. As Patersons strategist Tony Farnham noted, it’s hard to trade aggressively when the world’s biggest economy is shut, apart from futures.
How did insurance stocks on the ASX react to expectations of US claims from Hurricane Sandy?
Local insurance stocks wavered in anticipation of US claims: QBE slipped 1.3% to $13.02, IAG dropped 0.4% to $4.54, and Suncorp fell about 2% to $9.30, reflecting investor concern over potential payouts from the storm.
Which sectors moved on the day and how did they perform?
Among major sectors, financials added about 0.3%, materials gained roughly 0.1%, while energy stocks slipped around 0.1%, contributing to the market’s flat-to-slightly-positive finish.
What corporate news affected major Australian banks and their shares?
Commonwealth Bank (CBA) held its annual meeting and investors appeared reassured, with CBA finishing up around 52 cents at $57.31. National Australia Bank (NAB) was flat at $25.88 ahead of its full-year earnings report and after issuing a market update saying it had increased provisions to cover bad debt losses, mainly in Britain. ANZ and Westpac also gained modestly (ANZ up ~0.6% to $25.38; Westpac up ~0.4% to $25.34).
Could Hurricane Sandy affect US GDP and what might that mean for investors?
Tony Farnham warned the US December-quarter GDP could be affected because of the number of people impacted by Sandy. He also noted that, from a 2013 calendar perspective, reconstruction and additional construction activity could add to GDP depending on damage extent—something investors should factor into economic and market expectations.
What international economic data should investors be watching alongside Sandy developments?
Investors were also watching China’s purchasing managers’ index (PMI), due out on Thursday. Farnham said the PMI and Beijing’s guidance matter because Chinese leadership has signalled they won’t massively re-stimulate the economy but expect enough momentum for a hoped-for soft landing.
How did market participants describe the difficulty of trading while US markets were closed, and what trading option remained?
Market commentators said it would be very hard to trade aggressively with the US market—the world’s largest—closed. The main trading alternative mentioned was futures, which remained available while exchanges like the NYSE were shut.
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