Stocks flat on caution over EU summit

THE sharemarket closed almost unchanged yesterday after erasing early gains, with buyers growing cautious over next week's European summit.

By InvestSMART · 22 Oct 2011

By InvestSMART ·
22 Oct 2011

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THE sharemarket closed almost unchanged yesterday after erasing early gains, with buyers growing cautious over next week's European summit.

The S&P/ASX 200 Index dipped

3 points to 4141.9 after giving up a 24-point gain.

The benchmark this week lost 63.7 points, or 1.5 per cent, after soaring on Monday but taking heavy hits on Tuesday and Thursday.

Consumer staples led yesterday's decline, falling 1.37 per cent. The biggest gainer was the defensive healthcare sector, which rose

0.53 per cent.

"Despite early gains, we have since seen a reversal as investors position themselves ahead of the European summit," said IG Markets market strategist Stan Shamu.

"The miners have been sold off over the past few sessions, tracking metals prices lower."

Mr Shamu said many investors were taking a "wait and see" approach in the run-up to Wednesday's European Union summit.

Woodside Petroleum ended down 22? at $33.38, the lowest in two weeks, after the company reported that third-quarter revenue had risen 27 per cent, with higher commodity prices offsetting lower production.

Other energy stocks fared better, Oil Search firming 7? to $5.88 and Santos up 5? at $12.12.

Among the big miners, BHP Billiton gained 22? to $35.70 while Rio Tinto closed down 28? at $62.57 and Fortescue Metals slipped 6? to $4.25.

The big banks, soon to report their latest earnings results, finished mixed. ANZ gained 9? to $21.21 and National Australia Bank edged up 4? to $24.32 as Westpac backpedalled 3? to $21.50 and Commonwealth Bank slipped 17? to $47.55.

Investment bank Macquarie Group finished down 47?, or 2 per cent, at $22.53.

Coles owner Wesfarmers extended Thursday's 64? fall, losing 54?, or 1.7 per cent, to close at $31. The diversified company on Thursday reported an 8 per cent lift in first-quarter sales growth, its 13th straight quarterly increase.

Supermarket rival Woolworths, which is due to release quarterly sales results next week, fared little better, closing down 53?, or 2.2 per cent, at $24.06.

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Frequently Asked Questions about this Article…

What happened to the ASX and the S&P/ASX 200 in the market update?

The S&P/ASX 200 dipped 3 points to 4141.9 after erasing early gains. Over the week the benchmark lost 63.7 points (about 1.5%), with investors growing cautious ahead of an upcoming European Union summit.

Why were investors taking a 'wait and see' approach ahead of the European summit?

IG Markets strategist Stan Shamu said many investors were positioning themselves cautiously in the run-up to the EU summit, leading to a reversal of early gains. That cautious stance contributed to subdued trading and sector moves as participants awaited clarity from the meeting.

Which sectors led the market decline and which sectors outperformed?

Consumer staples led the decline, falling about 1.37%, while the defensive healthcare sector was the biggest gainer, rising about 0.53%. Miners were generally sold off, tracking lower metals prices, and energy stocks showed a mixed performance.

How did major energy companies like Woodside, Oil Search and Santos perform?

Woodside Petroleum ended at $33.38 — its lowest in two weeks — even though it reported third‑quarter revenue had risen 27% as higher commodity prices offset lower production. Oil Search firmed to $5.88 and Santos rose to $12.12 on the day.

What moved the big miners (BHP, Rio Tinto, Fortescue) in this update?

BHP Billiton gained to $35.70, Rio Tinto closed down to $62.57, and Fortescue Metals slipped to $4.25. The miners have been under selling pressure in recent sessions as metals prices moved lower.

How did the major banks trade and are their results coming up?

The big banks finished mixed: ANZ rose to $21.21, National Australia Bank edged up to $24.32, Westpac backpedalled to $21.50 and Commonwealth Bank slipped to $47.55. The article notes the major banks are soon to report their latest earnings results, which investors will be watching closely.

What did the report say about Wesfarmers and Woolworths and their sales trends?

Wesfarmers extended a recent fall and closed at $31, down about 1.7%; the company reported an 8% lift in first‑quarter sales growth, marking its 13th straight quarterly increase. Woolworths closed down about 2.2% at $24.06 and is due to release quarterly sales results next week.

As an everyday investor, what market indicators from this update should I watch next?

Based on the update, watch developments from the European Union summit, upcoming bank earnings, and movements in metals and commodity prices that affect miners and energy stocks. Also monitor sector shifts—especially in consumer staples and healthcare—since those sectors drove notable moves during the session.