Market drifts lower in lacklustre day
COMMENTS by the head of BHP Billiton's iron ore division that Chinese steel production is slowing, and the release of the Reserve Bank's recent board minutes, were the main drivers of sentiment yesterday as the sharemarket drifted lower.
COMMENTS by the head of BHP Billiton's iron ore division that Chinese steel production is slowing, and the release of the Reserve Bank's recent board minutes, were the main drivers of sentiment yesterday as the sharemarket drifted lower.The benchmark S&P/ASX 200 Index slipped 15.8 points to 4275.Resource stocks lost ground after BHP iron ore division president Ian Ashby said growth in Chinese demand for iron ore appeared to be "flattening", but that the company remained confident in the long-term demand for commodities generally.The currency slipped against its major trading partners as Rio Tinto also signalled that China's near-term growth was waning, raising concern that commodity prices will fall.At 5pm, the dollar was trading at $US1.0577, down from $US1.06.And news that the government's watered-down minerals resource rent tax which will raise $11 billion in three years from iron ore and coalminers passed through the Senate did little to mollify miners. Fortescue Metals, the country's third-biggest iron ore exporter, said the legislation was "complex" and "inefficient". It said it had engaged lawyers and would start proceedings "after the legislation has been enacted and legal opinion finalised". Fortescue shares slipped 6? to $5.92.BHP Billiton shares lost 4? to $35.31 and Rio Tinto dropped 24? to $65.61.Investors digested the minutes of the RBA's March board meeting that showed the central bank would maintain interest rates at present levels unless unemployment increased.Economists said the increase in the compulsory superannuation rate, from 9 to 12 per cent to be phased in from July next year was unlikely to affect the sharemarket. "The equities market is huge. The daily trading volumes swamp the daily contribution from super funds," St George chief economist Hans Kunnen said.Woodside Petroleum rose 35?, or 1 per cent, to $35.32, while Oil Search firmed 1? to $6.97 and Santos lost 2? to $14.51.Transurban was down 15?, or 3 per cent, at $5.54, after a Canadian pension fund sold more than 630,000 shares, continuing the sale of its 12.5 per cent stake.The big four banks were mostly weaker, with the exception of National Australia Bank, which advanced 5? to $24.20.Retailers lost ground, with Harvey Norman down 2.5? to $1.925 and David Jones remained in a trading halt, having last traded at $2.73, before its first-half earnings result today.With AAP