Greek election worries drag market lower

THE sharemarket closed lower yesterday, with investor caution about this weekend's Greek elections overriding positive offshore leads.

THE sharemarket closed lower yesterday, with investor caution about this weekend's Greek elections overriding positive offshore leads.

At the close, the benchmark S&P/ASX 200 Index was down 9.1 points, or 0.2 per cent, at 4063.8.

The market opened higher but quickly took a U-turn and traded lower for the rest of the day.

CMC Markets sales trader Miguel Audencial said that investors closing out long positions in case of a leftist Greek victory were balanced by others with short positions second-guessing that there might be relief for risk assets.

"The reasons for the rally in the US overnight were not based on economic fundamentals, they were based on speculation about further stimulus from the US," Mr Audencial said.

"That's not really a good foundation if you want to start a rally, that's why the selloff was quite quick."

In local economic news, the Westpac-Melbourne Institute Survey of Consumer Sentiment showed a rise for June of 0.3 per cent at 95.6 index points.

Whitehaven Coal shares soared after the miner said billionaire Nathan Tinkler had made a privatisation offer. Whitehaven gained 18?, or 4.5 per cent, to $4.18.

Investment company Macquarie Group announced it had bought a 5 per cent stake in casinos operator Echo Entertainment. Shares in Echo traded at $4.49 before going into a halt. Macquarie was one of the heaviest losers among the top 50 stocks, down 51? to $25.80.

The big miners were mixed. BHP Billiton closed up 20? at $31.92 and Rio Tinto clawed back early losses to finish down only 5? at $54.60.

Fortescue Metals was the stand-out among the top 50, closing 2.9 per cent stronger at $4.68.

Computershare was next best, rising 2.4 per cent to $7.82 after maintaining guidance despite a tough environment in Europe.

The four major banks were all weaker. ANZ was down 20? at $21.57, National Australia Bank was 7? lower at $22.15, Commonwealth Bank was 20? lower at $50.62 and Westpac was 8? worse at $20.49.

At the Sydney close, the spot gold price was up $US19.08 at $US1610.70 an ounce. Goldminer Newcrest dipped 1? to $24.64.

National turnover was 1.5 billion securities, worth $3.5 billion, with 411 stocks up, 564 down and 365 unchanged.

The dollar moved to within half a cent of parity with its US counterpart. At 5pm, it was trading at US99.52?, up from US98.95? on Tuesday.

ForexCT's head of research, Steven Dooley, said that while the market was cautious in the lead-up to the Greek elections on Sunday, the Aussie could move as high as US102? by the end of the week.

"Certainly everything the charts are telling us at the moment, despite all the bad news, is that the Aussie dollar and gold want to go higher," he said. AAP

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles