Higher CPI figure sends shares tumbling
THE stock market closed lower yesterday after the release of worse-than-expected inflation data and as the US debt ceiling stalemate continued.
THE stock market closed lower yesterday after the release of worse-than-expected inflation data and as the US debt ceiling stalemate continued.The benchmark S&P/ASX200 index slipped 35.9 points, or 0.78 per cent, to 4537.4, while the broader All Ordinaries index dropped 33.7 points, or 0.73 per cent, to 4612.6.RBS Morgans private client adviser Bill Bishop said the release of unexpectedly high local inflation data had sent the market lower.The consumer price index rose by 0.9 per cent in the June quarter, taking the annual rate of inflation to 3.6 per cent, from 3.3 per cent. The rise was more than most economists had expected. "The CPI is now outside the RBA's target band," Mr Bishop said. "It introduces a whole new ball game."People see all this bad news from overseas and they're not sure what's happening here."He said intensifying concerns about the US debt-ceiling deadlock had also weighed on the market.The White House and its divided Republican foes have failed to break an impasse that could see it default on its debt. Politicians in Washington now have a week to go before the US hits the August 2 deadline to raise the $US14.3 trillion ($12.92 trillion) debt ceiling.In local trade, materials and resource stocks had a rough day, with Mirabela Nickel the worst performer in the top 200 stocks. The Perth-based miner's shares fell 17?, or 8.02 per cent, to $1.95, despite boosting nickel production at its flagship Brazilian mine by 20 per cent during the three months to June 30.BHP Billiton fell 52? to $43.00, Rio Tinto was down 40? at $82.59.The spot price of gold in Sydney closed at $US1624.30 per fine ounce, up $US10.30 from Tuesday's local close of $US1614 per ounce. Newcrest Mining rose 32?, or 0.8 per cent, to $40.50 at the close.Banks and financials were also down, with Westpac worst hit, falling 34?, or 1.59 per cent, to $21.02. National Australia Bank fell 37? to $24.45, ANZ fell 27? to $21.28, while Commonwealth fell 40? to $49.82.Telstra fell 1? to $3.02.National turnover was 2.1 billion shares, worth $5 billion, with 426 shares up, 632 down, and 381 steady.