Investors content to watch from sidelines
THE sharemarket ended higher yesterday but pulled back from earlier gains, as investors digested news that France and Germany had a plan to fix the euro zone debt crisis.
THE sharemarket ended higher yesterday but pulled back from earlier gains, as investors digested news that France and Germany had a plan to fix the euro zone debt crisis.By the close, the S&P/ASX 200 Index was up 26.6 points, or 0.63 per cent, at 4227.6.The market opened about 1 per cent up yesterday after strong leads from US and European markets.Cameron Securities client adviser Adrian Leppinus said many investors were sitting on the sidelines even though the market had a second positive day on the euro zone debt news.The market has had a pretty decent run in the past few days, Mr Leppinus said."I think people are just taking a bit of a breather because, while they're progressing to try to fix all the issues [in Europe], it's not something that's going to happen overnight," he said."It's still reasonably positive out there, but everyone's being a little cautious after a few decent gains over consecutive days."MF Global's head of equity sales, Nick Burmester, said the market had eased back from the big gains made last week in a short-covering rally. Mr Burmester said he expected the equity market to trade sideways until there were firmer plans from Europe."I think everyone's still a bit uncertain as to what to do after a few good days," he said.He said news from the US reporting season, which kicked off last night, could affect local shares at the open today.Information technology stocks led the market to the close, rising 1.9 per cent.Consumer discretionary stocks were 1.2 per cent higher, with Fairfax Media shares up 3?, or 3.4 per cent, at 93?.Consumer staples and property trusts fell 0.16 and 0.58 per cent respectively.Woolworths dropped 23?, or 0.9 per cent, to $24.62. Treasury Wine Estate was among the weakest on the top 100. It shed 11?, or 2.8 per cent, to $3.86. The worst performer on the same index was James Hardie Industries, which fell 17?, or 2.9 per cent, to $5.80.BlueScope Steel was the strongest stock on the top 100, rising 5?, or 5.9 per cent, to 90?.Gold advanced strongly. At the close of the Australian session it was up $US27.74 at $US1678.55 an ounce.The dollar finished US1.4? higher at US99.72? after breaching parity several times, as traders awaited more news on Europe's debt crisis. It reached an overnight high of $US1.0015 as Wall Street stocks gained almost 3 per cent on the pledge by Germany and France to devise a plan to shore up Europe's banks against a Greek default.