Market twister amps up drama
It was a roller-coaster ride. Billions of dollars were wiped from and then piled back onto the sharemarket in a series of dramatic trading days and, when the dust settled, the bourse was sitting almost exactly where it began: less than half a point lower.
It was a roller-coaster ride. Billions of dollars were wiped from and then piled back onto the sharemarket in a series of dramatic trading days and, when the dust settled, the bourse was sitting almost exactly where it began: less than half a point lower.News that China cut its official interest rate by 25 basis points, the first reduction since 2008, did little to impress traders yesterday, who took it as a sign of growing concern over the growth outlook for the world's second-biggest economy.After a week of extraordinary headlines, the benchmark S&P/ASX 200 Index closed the week basically flat, down 0.18 points at 4063.7. The All Ordinaries Index finished down 5.8 points at 4111.1.Investors had been waiting for the Chinese to release a string of economic data this weekend, including consumer price index, producer price index, fixed asset investment and industrial production data but the rate cut announcement on Thursday night took the market by surprise."The timing of the rate cut, ahead of the keenly-awaited monthly data dump over the weekend, suggests that the Chinese economy almost certainly fails to show significant improvement in May," Commonwealth Bank currency strategist Andy Ji said.Shareholders exploited a trifecta of positive local economic news: the Reserve Bank cut rates on Tuesday by 25 basis points on Wednesday, economic growth of 1.3 per cent for the March quarter was stronger than expected on Thursday, employment grew by much more expected. It helped the Australian dollar post its first weekly gain in six weeks.Yesterday, the US Federal Reserve chairman, Ben Bernanke, dampened hopes of further economic stimulus in the US when he testified in front of the US Congress's joint economic committee.Bernanke had warned that the situation in Europe posed significant risks to the US financial system and economy and the fiscal cliff would pose a significant threat to the recovery.On the local bourse, traders sold the market down heavily early in the week amid growth fears before being buoyed by rate cuts and growth figures.On Friday, the market fell again. In the resources sector, global miner BHP Billiton rose 33? to $31.91. Rio Tinto rose 17? to $55.59. Miner Ivanhoe Australia rose 2? to 56.5? after its chief executive, Peter Reeve, resigned.National Australia Bank fell 40? to $22.16, Westpac fell 34? to $20.43, ANZ fell 25? to $21.56 and Commonwealth Bank fell 57? to $50.47. ANZ on Friday announced it would cut its variable home loan and business rates by 25 basis points, matching the RBA's cash rate cut.Among other stocks, casino operator Crown was 23? lower at $8.13 after major shareholder and billionaire James Packer succeeded in disrupting the board of rival casino operator Echo Entertainment, forcing the dumping of its chairman, John Story. Echo was 19? higher at $4.49.Qantas Airways fell 9? to 97? after it was placed on a ratings watch by Standard & Poor's.The price of gold in Sydney was $US1571.18 per fine ounce, down $US50.67 from Thursday's close of $US1621.75.with agencies