Investors sit tight as bargains go begging
THE sharemarket closed 0.6 per cent lower yesterday, with investors starting to hope that the central bank would next month cut interest rates for the first time in a year.
THE sharemarket closed 0.6 per cent lower yesterday, with investors starting to hope that the central bank would next month cut interest rates for the first time in a year.The local market opened almost 1 per cent down on a weak lead from Wall Street overnight. By the close yesterday, the benchmark S&P/ASX 200 Index was down 24.9 points, or 0.64 per cent, at 3872.1.Bell Potter senior adviser Stuart Smith said the market began to turn around after the Reserve Bank said as was widely expected that it would hold interest rates steady for the 11th consecutive month.There was now speculation that the RBA's comments meant the cash rate could be cut before the end of the year, he said.But Mr Smith said lower than expected trading volumes yesterday, after a public holiday on Monday in New South Wales, the ACT and South Australia, had not helped shares, despite enormous values, amid investor uncertainty.Turnover was 2.19 billion shares changing hands for $5.49 billion."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 10 stocks falling.Gold rose 2 per cent on Monday and was on track for its first three-day winning streak in a month, as bullion appeared to have regained its haven status. The spot price of gold in Sydney was $US1670.80 an ounce, up $US36.92 from Monday's close of $US1633.88.Gold stocks were among the only green spots on the market, with Australia's biggest goldminer, Newcrest, up 34?, or 1 per cent, at $33.90 and Kingsgate rising 18?, or 2.6 per cent, to $7.06.Telecoms were hit hardest at the close, down 1.2 per cent, despite being the outperforming sector for most of the day. 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 engineering sector had a mixed day. Toll-road owner ConnectEast was steady at 54.5? after Horizon Roads' $2.17 billion takeover received legal approval.Downer EDI fell 5? or 1.8 per cent, to $2.75, despite being awarded a $142 million contract to do electrical work on a resource project in Western Australia's Pilbara.Leighton Holdings fell 11?, or 0.6 per cent, to $18.17 on the news that workers will not return to the construction site of Australia's longest road tunnel, the Brisbane Airport Link, until at least tomorrow. They are demandingbeefed-up safety after a man's death. AAP