Stocks turn down as buyers think twice

THE sharemarket rally that began on Tuesday last week petered out yesterday, leaving the benchmark index down 0.8 per cent.

THE sharemarket rally that began on Tuesday last week petered out yesterday, leaving the benchmark index down 0.8 per cent.

The S&P/ASX 200 Index finished with a loss of

35.6 points at 4247.3.

CMC Markets trader Ben Taylor said the renewed strength of the dollar had prompted investors to pull back.

"I think people are really seeing that as an indication [they should] cut some of their long bets over the last week and consolidate," he said.

Mr Taylor said he expected the market to hold steady for the next couple of days as investors awaited greater direction from offshore markets.

"I don't think it's going to push much higher from here," he said. "People are still more scared than they are confident and it seems like people are sitting on a bit of a knife's edge right now."

Markets across Asia lost ground yesterday, though falls were slightly heavier in Australia.

Last night in Europe, the downturn gathered pace. After three hours' trading, London's FTSE 100 was down 1 per cent, France's CAC 40 was down 1.7 per cent and Germany's DAX had dropped 2.4 per cent.

The Australian session began promisingly after several companies issued positive financial reports.

CMC Markets analyst Ben Le Brun said investors, particularly from Asia, moved into strong performers at the start of the Australian reporting season.

Shares in Tabcorp closed up 3? at $3.22 after the company lifted net profit

14 per cent.

Among other companies reporting results or otherwise making news yesterday, Westpac lost 92?, or 4.4 per cent, to $20.25 after posting a 2 per cent fall in third-quarter cash earnings.

The rest of the major banks were lower, with NAB down 36? at $23.21, ANZ losing 30? to $20.35 and Commonwealth slipping

55? to $46.83.

Qantas dipped 0.5? to $1.525 after the airline announced a new strategy.

OneSteel was up 1.5? at $1.45 after the steel maker posted an 11 per cent fall in net profit.

Copper and gold miner OZ Minerals was down 45? at $11.90 after posting a 72 per cent profit fall following the settlement of a class action.

James Hardie rose 5? to $5.40 after the building products said it expected a higher profit this financial year after a 99 per cent fall in three-month profit to June.

Among the miners, BHP Billiton lost 42? at $39.43 and Rio Tinto fell $1.13 to $73.39.

Gold shot up $US33.73 to $US1769.33 an ounce. However, goldminer Newcrest dropped $1.70 at $38.70.

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