Market sits tight awaiting Bernanke report
At the close, the benchmark S&P/ASX 200 Index was down 4.3 points at 4981.7, while the broader All Ordinaries dipped 2.1 points to 4966.5.
A strong production report from BHP Billiton boosted sentiment in the resource sector, but that was offset by losses in other sectors.
Activity was muted as investors waited for Federal Reserve chairman Ben Bernanke's scheduled testimony to US Congress early on Thursday, CMC Markets senior trader Tim Waterer said.
"Traders appear to have hit the snooze button on the Australian market today, with the ASX 200 index flat-lining ahead of the key Bernanke testimony," he said.
BHP's annual production report showed higher than expected output of iron ore, and that followed Rio Tinto's better than expected first-half production report on Tuesday.
"Results from the bellwether miners in the past couple of days has helped to shore up some confidence in the materials sector, with the Rio and BHP production numbers helping offset lingering Chinese growth concerns," Mr Waterer said.
BHP shares gained 76¢, or 2.3 per cent, to $34.19 and Rio shares added 63¢, or 1.1 per cent, to $56.15. Fortescue Metals was 21¢ higher at $3.71, while Iluka gained 49¢, or 4.7 per cent, to $10.91 after it issued a positive outlook for the mineral sands market.
The financial sector lost ground, as did property owners. ANZ was the worst of the banks, down 35¢ to $28.80. Macquarie Group fell 77¢ to $44.33, while in the property sector, Westfield Group shed 12¢ to $11.33 and GPT dropped 8¢ to $3.71.
Telstra also lost ground, down 3¢ to $4.83.
The dollar edged higher before Dr Bernanke's appearance. Late on Wednesday it was buying US92.08¢, up from Tuesday's US91.82¢.
Traders were reluctant to sell the currency before Dr Bernanke's semi-annual appearance before an economics committee.
ANZ foreign exchange strategist Andrew Salter said Dr Bernanke was likely to reiterate his view that quantitative easing would not be unwound until the Fed's Federal Open Market Committee is convinced the economy is on the mend. Any comment supporting stimulus would cause US dollar weakness.
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The S&P/ASX 200 finished a touch down as investors stayed cautious ahead of Federal Reserve chairman Ben Bernanke’s scheduled testimony to US Congress. The index lost 4.3 points to 4,981.7 while the All Ordinaries slipped 2.1 points to 4,966.5, with overall activity muted as traders waited for guidance on US stimulus.
BHP’s stronger-than-expected annual production report lifted sentiment in the resources sector. BHP shares rose 76¢ (2.3%) to $34.19, while fellow miners Rio Tinto (+63¢ to $56.15), Fortescue (+21¢ to $3.71) and Iluka (+49¢ to $10.91) also climbed. The miner results helped shore up confidence in materials and partly offset other sector weakness.
The financial and property sectors lost ground. ANZ was the weakest of the banks, down 35¢ to $28.80, and Macquarie Group fell 77¢ to $44.33. In property, Westfield Group shed 12¢ to $11.33 and GPT dropped 8¢ to $3.71.
Telstra also eased back during the session, finishing down 3¢ at $4.83.
Traders were reluctant to make big moves in the Australian dollar ahead of Bernanke’s semi‑annual appearance because his comments could signal US policy on quantitative easing. The Aussie edged higher to buy US92.08¢ (up from US91.82¢) as market participants awaited clues on future stimulus that would move the US dollar.
ANZ foreign exchange strategist Andrew Salter expected Bernanke to reiterate that quantitative easing wouldn’t be unwound until the Fed is confident the US economy is recovering. Any comments supportive of further stimulus would likely weaken the US dollar, so traders were watching closely.
Recent production results from bellwether miners—Rio Tinto and BHP—helped shore up confidence in the materials sector by showing stronger output than expected, which in turn helped offset lingering concerns about Chinese growth, according to market watchers cited in the article.
On days when markets are waiting for major central bank commentary, expect muted trading and possible sector divergence: news-driven stocks (like miners reporting strong production) can outperform while interest‑rate sensitive sectors (banks, property) may lag. Watch key company reports and central bank updates closely, and be mindful that currency and sentiment shifts can follow the event.
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