QBE profit warning drags market into the red
THE sharemarket finished slightly lower after a surprise profit warning from QBE Insurance and disappointing data from China weighed on prices.
THE sharemarket finished slightly lower after a surprise profit warning from QBE Insurance and disappointing data from China weighed on prices.Shares in the insurance giant fell to eight-year lows after the company said profits for last year could halve due to a record level of claims from natural disasters. The stock ended down 12.7 per cent at $11.35, accounting for up to a fifth of the market's fall for the day."There won't be too many brave investors stepping in to catch this falling knife," said Peter Esho, an analyst for City Index.At the close, the benchmark S&P/ASX200 index was down 6.5 points at 4181 while the broader All Ordinaries fell 4.5 points to 4238.4. The March share price index futures contract fell 17 points to 4152.Markets took a further hit after data showing inflation in China - Australia's largest trading partner - failed to fall below the 4 per cent forecast by economists.All eyes will now be on the European Central Bank to see if it will move overnight to lower interest rates in an effort to stimulate the region's ailing economy.Among the gainers yesterday was embattled retailer Billabong, which added 3 per cent to $1.86, as bargain-hunting investors swooped on the stock after holiday sales proved better than initially feared.Overall, consumer discretionary stocks rose 0.4 per cent, including a 1.5 per cent rise in Myer to $2.06 and a 1.3 per cent rise in Harvey Norman to $1.98.The RBS Morgan Brisbane director of equities, Bill Chatterton, said retailers looked cheap after a slew of profit warnings sent share prices crashing in the run up to Christmas.Positive noises from fashion chain Noni B and interest from private equity groups were also spurring on the sector."It looks like the Christmas period wasn't catastrophic, so you might get a little bit of bounce back in some of those retailers," he said.Resources stocks ended higher, driven by a rise in metals prices as investors felt less optimistic to take a punt on riskier shares.Rio Tinto ended up 0.8 per cent at $64.73 after the miner said it had taken ownership of Canadian uranium company Hathor Exploration.Airlines ended mixed after calls for a surcharge on overweight passengers fell flat. The former Qantas chief economist Tony Webber suggested heavy people should pay more to fly in the same way passengers pay extra for excess baggage. The airline shed 1 per cent to $1.505.Virgin Australia rose 3.3 per cent after it and other budget airlines poured cold water on the idea.
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