Stocks take a hit after two-day sprint
THE sharemarket has quickly resumed its snakes-and-ladders behaviour of 2011, with the benchmark index giving up half of Wednesday's 2.1 per cent gain.
THE sharemarket has quickly resumed its snakes-and-ladders behaviour of 2011, with the benchmark index giving up half of Wednesday's 2.1 per cent gain.Wary investors booked profits after a lacklustre German bond auction overnight and fresh concerns about the state of Europe's banks. The S&P/ASX 200 finished down 45.1 points,or 1.1 per cent, at 4142.7."It all seems a case ofold-fashioned profit-taking, with no particular rhyme or reason," said CommSec chief economist Craig James. "Investors, if they see the sharemarket rise in the current environment, they're going to lock in those gains as they go along."Energy, resources and industrial stocks led the market lower after two days of stellar gains driven by a jump in commodity prices.Even traditionally defensive sectors, including telecommunications and healthcare, suffered amid the selloff.Financial stocks shed 1.1 per cent after more record overnight deposits with the European Central Bank showed how little confidence investors had in the region's financial sector, despite measures by the ECB and policymakers.News that UniCredit, Italy's biggest bank, had to offer shares at a massive 43 per cent discount to complete a ?7.5 billion ($A9.40 billion) capital-raising program sent bank shares tumbling in Europe and the US overnight."The European banks have been showing for a little while now that they're nervous of lending to each other and that's likely to continue," said Burrell Stockbroking adviser Jamie Elgar.One of the few Australian stocks to buck the trend was Transpacific Industries, which rose 0.6 per cent to 80.5?, despite news that the founder of the waste management company had launched legal action against his old business, claiming total damages of $4.6 million.Dealers will now be looking to the US private-sector jobs report and non-farm payrolls later this week for more direction. Any bump in the road is likelyto stoke another bout of profit-taking."There's no confidence out there that if you get one good set of figures, the one after will be good as well," said Intersuisse director of equities Andrew Sekely. "This is very much a day-to-day trading environment."Amid the market uncertainty, gold continued its rally. At the close of the Australian session , the spot price was up $US20.88 at $US1619.26 an ounce.The dollar slipped to a close at $US1.0322, from $US1.0353, as traders looked ahead to the release of US jobs figures. AAP