Stocks ease on RBA doubts on growth
THE sharemarket slipped into the red yesterday with no lead from Wall Street due to the Independance Day public holiday in the US.
THE sharemarket slipped into the red yesterday with no lead from Wall Street due to the Independance Day public holiday in the US.The sharemarket closed down after the Reserve Bank painted a downbeat picture of economic growth.The RBA said it was leaving interest rates on hold amid expectations that growth through 2011 would be weaker than previously thought.As on Monday, the sharemarket put on a spurt in the opening minutes. The S&P/ASX 200 Index was up 16 points at its best but it slid to close at 4598.1, down12.6 points, or 0.27 per cent.IG Markets institutional dealer Chris Weston said the closure of US markets had weighed on Australian trading.But he was optimistic that the Australian sharemarket would move higher in coming months despite a report from ratings agency Moody's about the health of Chinese banks.The agency reported that it might downgrade the banks' credit outlook to negative because official Chinese auditors had failed to account for 3.5 trillion yuan ($A503 billion) of local-government debt.It said Chinese banks risked having their credit outlook downgraded, "considering the apparent absence of a clear master plan to deal with this issue".Shares in Macquarie Group fell more than 1 per cent after broker UBS lowered its forecasts for the investment bank's first-half earnings by 20 per cent. The stock closed down 36?, or1.1 per cent, at $31.14. This still left it 44? above the 26-month low reached on Monday last week.The grounding of Tiger Airways continued to benefit the shares of its competitors. Qantas gained 5?, or 2.5 per cent, to $2.02 while Virgin Blue was steady at 31.5? after a 10.5 per cent rise on Monday.Among leading miners, BHP Billiton was up 21? at $44.23 and Rio Tinto firmed 17? to $83.32.The big banks all eased. National Australia Bank shed 28?, or 1.1 per cent, to $25.14, while Commonwealth lost 28?, or 0.5 per cent, to $51.78, Westpac dipped 5? to $21.97 and ANZ slipped 1? to $21.93.The spot price of gold edged up US97? to close at $US1494.76 an ounce. Goldminer Newcrest dipped 15? to $37.46.The dollar yesterday slipped below $US1.07, finishing the Australian session at $US1.0684.HSBC's head of global foreign exchange, Nick Socratous, said any news of a slowdown in China could weaken the Aussie. However, he expected it to stay between $US1.04 and $US1.08 in coming weeks.