Stocks dip after losses in US and Europe

THE sharemarket closed slightly lower yesterday after energy stocks lost ground and Westpac and Macquarie Group traded without a dividend.

By InvestSMART · 8 Nov 2011

By InvestSMART ·
8 Nov 2011

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THE sharemarket closed slightly lower yesterday after energy stocks lost ground and Westpac and Macquarie Group traded without a dividend.

The S&P/ASX 200 Index finished down 7.7 points, or 0.18 per cent, at 4273.4, though this was 21 points above its low of the session.

Shaw Stockbroking senior deal Jamie Spiteri said trading activity was subdued and the market had followed Wall Street and European markets lower in response to last week's Group of 20 nations meeting in Cannes.

At the weekend, political leaders in Greece sealed a historic deal to form a national unity government to haul the debt-wracked country, and the euro zone, 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 and Macquarie Group went ex-dividend, contributing to the slide

in the benchmark index. Westpac lost 97?, or 4.4 per cent, to $21.11, while Macquarie fell 96?, or 4 per cent to $23.04.

Other big banks put in a mixed performance, with ANZ improving 17?, or

0.8 per cent, to $21.19, and Commonwealth gaining 29?, or 0.6 per cent, to $49.32.

National Australia Bank dipped 1? to $25.18.

BHP Billiton was down 25?, or 0.7 per cent, at $37.70 and Rio Tinto gave up $1.17 or 1.7 per cent, to $68.80.

Oil and energy majors also sank. Woodside Petroleum lost 57?, or 1.6 per cent, to $36.10, Santos fell 7? to $13.05 and Oil Search slipped 5? to $6.38.

Orica was a rare bright spot in the materials sector, gaining $1.11, or 4.6 per cent, to $25.41 after the explosives and mining services supplier reported a 4 per cent rise in underlying full-year profit.

Gold major Newcrest gained 72?, or 2.1 per cent, to $35.72. At the Sydney close, spot gold was up $US7.77 at $US1770.18 an ounce.

Computershare surged $1.14, or 15.6 per cent, to $8.44 after announcing it was free to close the acquisition of the share-owner services business of Bank of New York Mellon.

National turnover was 1.56 billion securities worth $3.74 billion, with 455 stocks up, 511 down and 381 unchanged.

The dollar fell almost half a US cent to $US1.0357 as traders awaited further developments on the resolution to Greece's sovereign debt woes.

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Frequently Asked Questions about this Article…

Why did the ASX200 finish slightly lower today?

The S&P/ASX 200 fell 7.7 points (0.18%) to 4,273.4, pressured by losses in energy stocks and large banks going ex-dividend. Trading was subdued as local markets followed weaker moves in the US and Europe, with investors reacting to developments from the G20 meeting and ongoing uncertainty over Greece's debt situation.

How did Westpac and Macquarie trading ex-dividend affect the market?

Westpac and Macquarie trading ex-dividend contributed to the benchmark's slide. Westpac dropped 97c (4.4%) to $21.11 and Macquarie fell 96c (4.0%) to $23.04, reflecting the typical share-price adjustment when a stock goes ex-dividend.

Which bank stocks moved today and what were their prices?

Big-bank moves were mixed: ANZ rose 17c (0.8%) to $21.19, Commonwealth Bank gained 29c (0.6%) to $49.32, National Australia Bank dipped about 1c to $25.18, while Westpac and Macquarie were weaker after going ex-dividend (Westpac $21.11, Macquarie $23.04).

What happened with energy and mining stocks on the ASX?

Oil and energy majors slipped: Woodside Petroleum lost 57c (1.6%) to $36.10, Santos fell 7c to $13.05, and Oil Search eased 5c to $6.38. Major miners were also softer: BHP Billiton fell 25c (0.7%) to $37.70 and Rio Tinto gave up $1.17 (1.7%) to $68.80.

Were there any standout winners on the market today?

Yes. Orica was a bright spot in materials, rising $1.11 (4.6%) to $25.41 after reporting a 4% rise in underlying full-year profit. Computershare surged $1.14 (15.6%) to $8.44 after saying it was free to close the acquisition of Bank of New York Mellon’s share-owner services business. Gold major Newcrest also gained 72c (2.1%) to $35.72.

How did gold and the Australian dollar move and why does it matter?

Spot gold was stronger, up US$7.77 to US$1,770.18 an ounce at the Sydney close, which can influence mining stocks. The Australian dollar fell almost half a US cent to US$1.0357 as traders awaited further developments on efforts to resolve Greece’s sovereign debt woes—currency moves can affect exporters, importers and commodity prices.

What did market commentators say about the influence of European news?

Jamie Spiteri from Shaw Stockbroking said markets were reacting to every Europe-related headline after last week’s G20 meeting in Cannes. He noted that while political steps—such as Greece forming a national unity government—are positive, markets remain hesitant about how long a convincing resolution will take to be executed.

What was overall trading volume and breadth on the day?

National turnover was 1.56 billion securities worth $3.74 billion. Market breadth was slightly negative with 455 stocks up, 511 down and 381 unchanged.