Flight from miners drags index lower
THE sharemarket ignored a positive lead from Wall Street and closed lower yesterday after being dragged down by risk-averse investors abandoning resource stocks.
THE sharemarket ignored a positive lead from Wall Street and closed lower yesterday after being dragged down by risk-averse investors abandoning resource stocks.A speech by US Federal Reserve chief Ben Bernanke gave a downbeat assessment of the world's biggest economy for the second half of this year, but he did not commit to a fresh economic stimulus package unless things got worse.At the close, the S&P/ASX 200 Index was down 17.2 points, or 0.41 per cent, at 4123.6.CMC Markets senior trader Tim Waterer said investors did not buy Dr Bernanke's message, as Americans had, because the Australian market was so resource-heavy and there were concerns about commodities demand."We probably would've liked him to lean one way or another with QE3 (quantitative easing) in coming months," he said."The market likes to deal in shades of black and white grey is met with a selling approach, as we've seen today."It was a tale of two halves in the market today with any buying momentum going towards financial stocks eking out modest gains."Resource stocks, including mining and energy companies, finished more than 2 per cent weaker.BHP Billiton shrank 61?, or 2 per cent, to $30.29, its lowest since February 2009.The global miner's June-quarter production report showed a lift in iron ore production to record levels but investors were worried about the future, given slowing growth in China and the dire economic situation in Europe.Fellow miner Rio Tinto faced the same issues, plunging to a three-year low, shedding $1.66, or 3.5 per cent, to $52.78.The banks, with their higher dividends, fared better. Commonwealth Bank, the biggest market-value company on the ASX after BHP, came in as the day's best performer, up 35? at $55.25.Westpac was 9? stronger at $22.59, ANZ also rose 9?, to $22.96, and NAB gained 7? to $23.77.Gerard Lighting shares leapt 21.5? to $1.02 on resumption of trading after it recommended that shareholders accept a $186 million takeover offer from Lighting Group Australia Pty Ltd.Spot gold was down $US10.37 at $US1581.53 an ounce at the Sydney close.