Investors hold nerve after Wall Street falls
The benchmark S&P/ASX 200 Index was down 17.1 points, or 0.34 per cent, at 4950.8, while the broader All Ordinaries fell 22.7 points, or 0.46 per cent, to 4944.1.
The market was led lower in the wake of a sharp fall on Wall Street overnight, concerns about the Boston bombing, and a continuing drop in commodity prices.
OptionsXpress market analyst Ben Le Brun said the market had been expected to perform badly on Tuesday after events in the US.
The bombings in Boston and disappointing China growth rocked US stocks, sending the S&P 500 down more than 2 per cent.
"Things could have been a lot worse ... but it [the Australian market] showed a little bit of resilience," Mr Le Brun said. "The market is in watch-and-see mode."
He said local investors appeared to be expecting a bounce back in the US after markets digested information on the Boston Marathon bombings. "They might just realise that it is an isolated incident, and it is business as usual ... I think that's the expectation here anyway."
He said the prime driver of the fall on the Australian market was lower copper and gold prices, which had affected resources stocks.
In the resource sector, BHP Billiton was 16¢ lower at $32.15. Rio Tinto shed 11¢ to $54.98 despite the company saying its global iron ore production rose to 61 million tonnes in the March quarter, up 6 per cent on the same period last year.
Gold stocks continued to suffer because of a falling gold price. Newcrest led the falls, closing 5.1 per cent lower at $17.
Among the big banks, ANZ lifted 7¢ to $28.86, Westpac dipped 9¢ to $31.50, National Australia Bank added 6¢ to $31.83, and Commonwealth Bank sagged 37¢ to $68.14.
Among other stocks, cattle producer Australian Agricultural Co slipped 1¢ to $1.165 after it said it would lower the value of its herds, partly because dry weather had affected domestic cattle prices.
Bond futures prices drifted lower after spiking following the Boston bombings. Nomura head of fixed income Jon Linton said bond futures rallied early on Tuesday after falls on global sharemarkets and the bombings, but then spent the session moving lower.
Mr Linton said part of the reason for the weakness was that futures prices had already rallied towards the top of their recent range.
Frequently Asked Questions about this Article…
The S&P/ASX 200 and All Ordinaries both fell after a sharp fall on Wall Street, concerns about the Boston Marathon bombings, and continuing drops in commodity prices. The S&P/ASX 200 was down 17.1 points (0.34%) to 4,950.8 and the All Ordinaries fell 22.7 points (0.46%) to 4,944.1.
Analysts said the bombings and a big sell‑off in US markets (the S&P 500 was down more than 2% overnight) put Australian investors into a 'watch‑and‑see' mode. OptionsXpress analyst Ben Le Brun noted markets were expected to perform badly but showed some resilience as local investors hoped for a US bounce once the incident was digested.
Resources and gold stocks led the falls because of lower copper and gold prices. Miners and gold producers were hit as commodity weakness weighed on their shares.
BHP Billiton fell 16 cents to $32.15 and Rio Tinto dropped 11 cents to $54.98. Rio Tinto did report that global iron ore production rose to 61 million tonnes in the March quarter, up 6% year‑on‑year, but that didn't prevent the share decline amid weaker commodity prices.
Gold stocks suffered because the gold price fell. Newcrest led the gold sector declines, closing 5.1% lower at $17.
Bank results were mixed: ANZ rose 7 cents to $28.86, Westpac dipped 9 cents to $31.50, National Australia Bank added 6 cents to $31.83, and Commonwealth Bank fell 37 cents to $68.14.
Bond futures initially spiked as markets reacted to the bombings and global falls, but then drifted lower during the session. Nomura's head of fixed income, Jon Linton, said futures had rallied early but then softened, partly because prices had already moved toward the top of their recent range.
Yes. Australian Agricultural Co slipped 1 cent to $1.165 after saying it would lower the value of its herds, citing dry weather that had affected domestic cattle prices.
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