Index ends where it began after big week
IT WAS a roller-coaster ride. Billions of dollars were wiped off and then piled back on to the sharemarket in a series of dramatic trading days, and when the dust settled the market was sitting almost exactly where it began.
IT WAS a roller-coaster ride. Billions of dollars were wiped off and then piled back on to the sharemarket in a series of dramatic trading days, and when the dust settled the market was sitting almost exactly where it began.News that China had lowered its official interest rate by 25 basis points, the first cut since 2008, did little yesterday to impress traders, who took it as a sign of growing concern about the growth outlook for the world's second-biggest economy.After a week of extraordinary headlines, the benchmark S&P/ASX 200 Index closed the week flat, down 0.18 points at 4063.7.Investors had expected the Chinese to release a string of economic data this weekend, including consumer price index, the producer price index, fixed-asset investment and industrial production data, but the rate cut announcement on Thursday night took the market by surprise."The timing of the rate cut, ahead of the keenly awaited monthly data dump over the weekend, suggests that the Chinese economy almost certainly fails to show significant improvement in May," said Commonwealth Bank currency strategist Andy Ji.Shareholders this week benefited from a trifecta of positive local economic news: the Reserve Bank's 25-basis-point rate cut on Tuesday Wednesday's stronger than expected economic growth of 1.3 per cent for the March quarter and Thursday's impressive jobs number.The news also helped the dollar post its first weekly gain in six weeks.Yesterday US Federal Reserve chairman Ben Bernanke dampened hopes of further economic stimulus in the US when he testified in front of the US Congress's Joint Economic Committee, warning that the situation in Europe posed significant risks to the US financial system and economy.The Australian market sold down heavily early in the week on growth fears before being buoyed by the rate cut and growth figures.Yesterday it fell again, though the resource leaders firmed. BHP Billiton put on 33? to $31.91 and Rio Tinto rose 17? to $55.59.The big banks all lost ground, NAB falling 40? to $22.16, Westpac 34? to $20.43, ANZ 25? to $21.56 and Commonwealth 57? to $50.47.ANZ yesterday announced it would cut its variable home loan and business rates by 25 basis points, matching the Reserve Bank's cash-rate cut on Tuesday.Among other stocks, casino operator Crown was 23? lower at $8.13 after major shareholder and billionaire James Packer succeeded in disrupting the board of rival casino operator Echo Entertainment, forcing the dumping of chairman John Story. Echo closed 19? higher at $4.49.Qantas was off 9? at 97? after S&P placed it on ratings watch.Gold fell heavily on dashed hopes for further US economic stimulus. It closed down $US50.67 at $US1571.18 an ounce.