Solid jobs data offset by fears over carbon tax

'The figures were really good and should have been well received.'

By InvestSMART · 8 Jul 2011

By InvestSMART ·
8 Jul 2011

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THE stockmarket ended flat as gains in the retail sector were offset by losses caused by uncertainty over the government's carbon price plans.

The S&P/ASX200 index rose 0.5 points to 4605.5, and the All Ordinaries rose 2.5 points to 4666.1.

The September share price index futures contract was six points lower at 4585, with 30,171 contracts traded.

The director of equities at RBS Morgans, Bill Chatterton, said the market received only a small boost from positive labour force figures, mainly in the retail sector.

The data showed the unemployment rate remained steady at 4.9 per cent in June.

"The figures were really good and that should have been received well," Mr Chatterton said. "But the market at the moment is in a bearish mood and it doesn't give proper value to good news that comes out."

The surfwear retailer Billabong rose 20? to $6.24, Myer rose 6?, or 2.33 per cent, to $2.63, JB Hi-Fi rose 39? to $16.98 and David Jones rose 7? to $3.97.

Mr Chatterton said investors were cautious because of debt concerns in Europe and the United States, but uncertainty about the composition of the carbon scheme was also a factor.

"It is having, no question, a very significant negative impact, and it's going to take some time before everyone can understand the way it will play out and what the impacts will be," he said.

The resources sector was mixed. BHP Billiton fell 3? to $44.42 and Rio Tinto 5? to $83.55. Rio's majority-owned miner Coal & Allied bounced back from losses on Wednesday, rising $2.60 to close at $102.71.

The price of gold in Sydney closed at $US1532.93 an ounce, up $US15.75. Newcrest rose 35? to $38.50.

News Corp fell 62?, or 3.61 per cent, to $16.55, amid a backlash over the phone hacking scandal in Britain. News's non-voting scrip fell 66?, or 3.95 per cent, to $16.07.

A Fat Prophets analyst, Greg Fraser, said the falls were an overreaction, since newspapers made only a small contribution to News Corp's earnings compared with its television assets.

National turnover was 1.75 billion shares worth $4.1 billion.

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Frequently Asked Questions about this Article…

How did the ASX perform today and what do the index moves mean for investors?

The stockmarket finished essentially flat: the S&P/ASX200 edged up to 4605.5 and the All Ordinaries closed at 4666.1. That small net move shows mixed sentiment — pockets of strength in retail were offset by weakness elsewhere, so investors should read this as a cautious market rather than a clear uptrend.

Which retail stocks helped lift the market and what were their closing prices?

Retailers provided the main lift: Billabong closed at $6.24, Myer at $2.63, JB Hi‑Fi at $16.98 and David Jones at $3.97. Those gains were a bright spot for the ASX even as other sectors struggled.

How is uncertainty about the government's carbon price affecting ASX stocks?

Uncertainty over the composition of the carbon price scheme was cited as a meaningful negative for market sentiment. RBS Morgans’ director of equities Bill Chatterton said the carbon scheme uncertainty is weighing on investor confidence and making the market more bearish.

What happened to major resources stocks and the gold sector today?

Resources were mixed: BHP Billiton closed at $44.42 and Rio Tinto at $83.55, while Rio’s majority‑owned Coal & Allied bounced back to $102.71. Gold prices in Sydney rose to US$1,532.93 an ounce (up US$15.75), and Newcrest rose to $38.50, reflecting strength in the precious metals space.

Why did News Corp shares fall and how did analysts react?

News Corp shares fell amid backlash over the phone‑hacking scandal in Britain — shares closed at $16.55 and the non‑voting scrip at $16.07. Fat Prophets analyst Greg Fraser called the falls an overreaction, noting newspapers make a relatively small contribution to News Corp’s overall earnings compared with its television assets.

What did the latest jobs data show and why didn't it boost the market more?

June unemployment remained steady at 4.9%. RBS Morgans’ Bill Chatterton said the labour figures were 'really good' and should have been received well, but the prevailing bearish mood and other concerns meant the market didn’t fully reward the positive data.

Were there notable moves in futures or trading turnover that investors should know about?

Yes — the September share price futures contract was six points lower at 4585 with 30,171 contracts traded. National turnover on the day was 1.75 billion shares worth $4.1 billion, indicating active but cautious trading.

What are the main risks everyday investors should watch based on this market update?

The article highlights three key risks to monitor: ongoing uncertainty about the government’s carbon price scheme, international debt concerns in Europe and the US, and company‑specific news such as the News Corp scandal. These factors are influencing sentiment across sectors and are worth tracking for portfolio decisions.