Hopes of rate cut turn tide in a sea of red
THE sharemarket again finished in the red after offshore markets fell sharply overnight.
THE sharemarket again finished in the red after offshore markets fell sharply overnight.The local bourse opened almost 1 per cent lower but by the close had clawed back some ground as hopes were raised that the Reserve Bank of Australia would cut interest rates next month.The benchmark S&P/ASX200 index fell 24.9 points, or 0.64 per cent, to 3,872.1, while the broader All Ordinaries was down 25.1 points, or 0.63 per cent, at 3,935.6.The December share price futures index fell 8 points to 3880, with 50,287 contracts traded.Bell Potter senior adviser Stuart Smith said the market began to turn around after the announcement - widely expected - by the Reserve Bank that it would hold interest rates steady for the 11th consecutive month.Mr Smith said there was now speculation that comments by the RBA meant the cash rate could be cut before the end of the year.He said said lower than expected trading volumes, after a public holiday in NSW, the ACT and South Australia on Monday, had not helped the market amid uncertainty. Turnover was 2.19 billion shares changing hands for $5.49 billion."The fact is that Australia is a very thin market ... we are spectating, like sitting on the dock of the bay, watching the tide come in and go out," he said.All sectors had lost ground at the close, with about six out of ten stocks falling.Gold prices again started to rise as bullion appeared to have regained its safe haven status against global economic uncertainty.The spot price in Sydney was $US1,663.4 per ounce, up $US29.52.Gold stocks were among the few to advance yesterday, with Australia's biggest goldminer, Newcrest, up 34?, or 1 per cent, at $33.90. Kingsgate Consolidated was up 18?, or 2.6 per cent, to $7.06.Telecoms were hit hard at the close, with the sector losing 1.2 per cent. Telstra fell 4?, or 1.3 per cent, to $3.All the major retail banks ended lower, except ANZ, which rose 4? to $18.98.The big miners also lost ground, with BHP Billiton down 29? at $33.86, and rival Rio Tinto falling 30? to $59.