Rebounding market edges back to black
THE sharemarket completed a tumultuous week of trading yesterday by nudging into the black despite persistent concerns about US economic growth.
THE sharemarket completed a tumultuous week of trading yesterday by nudging into the black despite persistent concerns about US economic growth.The market followed positive leads from Wall Street and Asia for its third day of gains this week.The benchmark S&P/ASX 200 Index finished up 31.8 points, or 0.8 per cent, at 4172.6. Analysts said investor panic that hit the market early in the week had subsided but warned the US economy had yet to show substantial signs of recovery.Commonwealth Bank economist Savanth Sebastian said global equity markets were beset with uncertainty. He said the US Federal Reserve's historic decision to keep interest rates down for two years indicated it was worried about the economy. "It does seem like a recovery is on track, but I think it's going to be a couple of months before we see improvement once again in the data," he said. "I think it's too soon for markets to be celebrating that we've hit the bottom."Macquarie Bank analyst Brian Redican said confidence in the Australian economy had helped the market rebound this week. On Monday the S&P/ASX 200 Index plunged 119.3 points after ratings agency Standard & Poor's downgraded the US credit rating. The market regained Monday's losses."What we have seen is a bit more recognition now that the fundamentals of the Australian economy do remain quite sound," he said.All market indices rose yesterday. However, the heavyweight materials and finance sectors posted mild gains, rising 0.9 per cent and 0.3 per cent respectively.Mr Redican said rumours of a credit rating downgrade in France that emerged earlier this week continued to plague bank stocks. While the rumours proved false, he said an undercurrent of concern had dampened enthusiasm for bank shares.The big four banks' performance was mixed. NAB rose 6? to $22.96, while Westpac gained 2? to $20.47. Commonwealth dropped 2? to $48.56 and ANZ fell 17? to $19.92.The big miners were among the strongest performers. BHP Billiton moved up 28? to $38.21 and Rio Tinto picked up $1.11 to $71.52.