Shares dip as investors digest events in Europe

THE sharemarket closed slightly lower after energy stocks lost ground and Westpac and Macquarie Group traded ex-dividend.

By InvestSMART · 8 Nov 2011

By InvestSMART ·
8 Nov 2011

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THE sharemarket closed slightly lower after energy stocks lost ground and Westpac and Macquarie Group traded ex-dividend.

The benchmark S&P/ASX200 index closed down 7.7 points at 4273.4, while the broader All Ordinaries fell 7.2 points to 4335.3.

Jamie Spiteri, senior dealer with Shaw Stockbroking, said trading was subdued and the market had followed Wall Street and European markets lower on the back of the G20 meeting in France last week.

Political leaders in Greece sealed a historic deal at the weekend to form a national unity government to haul the country back from the brink of disaster.

"Markets are reacting to every news headline regarding Europe at the moment," Mr Spiteri said.

"At the end, it'll take some fairly committed political action for it all to be executed, and time for it all to be resolved. The market is hesitant over how long it will actually take to get a convincing resolution ... but there are some small steps in the right direction."

Westpac fell 97? to $21.11 as it traded ex-dividend, while Macquarie fell 97? to $23.04.

Other big commercial banks put in a mixed performance, with ANZ up 17? to $21.19, and the Commonwealth Bank up 29? at $49.32, while National Australia Bank dipped 1? to $25.18.

BHP Billiton eased 25? to $37.70 and rival mining giant Rio Tinto was down $1.17 at $68.80.

Oil and energy majors also sank into negative territory, with Woodside Petroleum down 57? to $36.10.

Explosives and mining services supplier Orica was a rare bright spot in the materials sector, up $1.11 to $25.41 after reporting a 4 per cent rise in underlying full-year profit.

Gold major Newcrest also moved higher, gaining 72? to $35.72.

The spot price of gold was $US1770.50 per ounce, up $US8.10.

Computershare surged $1.14, or 15.62 per cent, to $8.44 after announcing it was free to close the acquisition of the share owner services business of the Bank of New York Mellon.

National turnover was 1.55 billion securities worth $3.7 billion. The December share price index futures contract fell 4 points to 4,281.

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Frequently Asked Questions about this Article…

Why did the ASX share market dip today?

The S&P/ASX 200 closed slightly lower, down 7.7 points to 4,273.4, as energy stocks lost ground and major banks traded ex-dividend. Traders described activity as subdued, with local markets following Wall Street and European falls after the recent G20 meeting and ongoing headlines about Europe.

What does 'traded ex-dividend' mean and how did it affect Westpac and Macquarie?

'Traded ex-dividend' means a stock is trading without the entitlement to the upcoming dividend, and its price typically adjusts accordingly. In the article both Westpac and Macquarie traded ex-dividend and fell, closing at $21.11 and $23.04 respectively.

Which sectors weighed on market performance and why should investors care?

Oil and energy majors and some large miners pulled the market into negative territory—Woodside Petroleum fell to $36.10, BHP eased to $37.70 and Rio Tinto slipped to $68.80. Everyday investors should watch sector moves because weakness in energy and materials can drag broader indexes and affect resource-heavy portfolios.

How did the big Australian banks perform on the day?

Performance was mixed: Westpac and Macquarie fell after trading ex-dividend, while ANZ and Commonwealth Bank finished higher (ANZ to $21.19 and Commonwealth Bank to $49.32) and National Australia Bank dipped to $25.18. Bank share moves were a notable part of the market’s overall direction.

Which individual stocks stood out as winners and why?

Computershare was a clear winner, surging to $8.44 (up 15.62%) after announcing it was free to close the acquisition of the Bank of New York Mellon’s share owner services business. Orica also outperformed, rising to $25.41 after reporting a 4% rise in underlying full‑year profit, and gold major Newcrest moved higher to $35.72.

What happened to gold and commodity prices, and what did that mean for resource stocks?

The spot price of gold rose to US$1,770.50 per ounce (up US$8.10), which helped some gold stocks like Newcrest move higher. However, other commodity-linked names such as BHP and Rio Tinto were softer, underscoring that commodity price moves affect resource stocks unevenly.

How are European headlines and the G20 meeting affecting Australian investors?

Investors are reacting to every Europe-related headline after the G20 meeting, and the formation of a Greek national unity government was noted in the article as a step toward stability. That uncertainty and headline sensitivity have made markets cautious and contributed to subdued trading.

What was overall market activity and liquidity like during the session?

National turnover was 1.55 billion securities worth about $3.7 billion, indicating moderate trading activity. The broader All Ordinaries fell to 4,335.3 and December share price index futures eased four points to 4,281.