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Investors lukewarm on Obama's plan

THE sharemarket finished slightly higher yesterday after shedding most of its earlier gains as traders took a wait-and-see approach to the US debt crisis.
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By InvestSMART · 10 Sep 2011
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By InvestSMART ·
10 Sep 2011
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THE sharemarket finished slightly higher yesterday after shedding most of its earlier gains as traders took a wait-and-see approach to the US debt crisis.

The S&P/ASX 200 Index closed up 6.7 points, or 0.16 per cent, at 4194.7. This left it down 48.2 points, or 1.1 per cent, for the week.

The market climbed 44 points in response to US President Barack Obama's highly anticipated

$US447 billion ($A421 billion) plan to Congress.

Wilson HTM's head of wealth management, Andrew Coppin, said investors were wary of whether President Obama's American Jobs Act would pass in Congress, and were awaiting Wall Street's response. The plan was presented to Congress after the close of Thursday's trading.

"Counterbalancing that, there are still significant issues about European debt. We've got a G7 [Group of Seven nations] conference in France today and tomorrow . . . So, people will be looking to see what response comes out of Europe," he said.

Wealth Within analyst Janine Cox said the market was highly reactive to news from the US.

Gold stocks made big moves, with Australia's biggest goldminer Newcrest Mining up 31? at $39.86. Perseus Mining was trading 11?, or 2.8 per cent, higher at $4, with OceanaGold Corp was up 14?, or

5.9 per cent, at $2.52.

Investors also poured money into consumer staples, with the

sector trading 0.57 per cent higher.

Goodman Fielder, owner of

grocery brands like Wonder White and Helga's bread, was the best

performer in the top 10 stocks, gaining 3.5?, or 5.6 per cent, to 66.5?.

Metcash fell 3? to $4.19 after the competition watchdog said it would appeal against a Federal Court judgment that paved the way for the

grocery wholesaler to take over the Franklins supermarket business.

Telecoms closed up 7 per cent, with Telstra shares 2? higher at $3.04.

Healthcare and energy stocks fell in afternoon trade, closing down 0.21 and 0.27 per cent respectively.

The financials finished the day 0.19 per cent higher. Westpac was up 4? at $20.13.

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Frequently Asked Questions about this Article…

The S&P/ASX 200 finished slightly higher after the announcement: it closed up 6.7 points (0.16%) at 4,194.7. The market had climbed about 44 points earlier in response to the $US447 billion (about $A421 billion) plan, but investors remained cautious about whether the proposal would pass Congress.

Traders were balancing hope from the US jobs plan with ongoing concerns about the US debt crisis and European debt. The upcoming G7 meeting in France and Wall Street’s reaction were singled out as important near‑term influences on market direction.

Gold stocks made strong moves. Newcrest Mining traded around $39.86 and rose sharply, while smaller miners also gained — for example, Perseus Mining moved to about $4 and OceanaGold was around $2.52 — as investors sought exposure to gold.

Yes — consumer staples outperformed, trading about 0.57% higher. Goodman Fielder was the best performer among the top 10 stocks, reflecting investor interest in defensive grocery and household names on the news flow.

Metcash shares fell and were trading at about $4.19 after the competition regulator said it would appeal a Federal Court judgment that had paved the way for Metcash to take over the Franklins supermarket business.

Telecoms led gains (the sector closed up strongly) with Telstra shares trading at about $3.04. Healthcare and energy finished lower (down around 0.21% and 0.27% respectively), while the financial sector closed a touch higher (about 0.19%), with Westpac trading near $20.13.

Analysts noted a cautious, news‑driven market. Wilson HTM’s Andrew Coppin said investors were wary about whether the American Jobs Act would pass and were waiting to see Wall Street’s response. Wealth Within’s Janine Cox described the market as highly reactive to US news.

Keep an eye on three things: congressional progress on major US policy (like the Jobs Act), Wall Street’s follow‑through after US announcements, and developments on European debt and international meetings such as the G7 — all of which can quickly shift sentiment on the ASX.