COMMENTS from US Federal Reserve chairman Ben Bernanke that he would consider doing more to stimulate growth in the US helped lift the Australian market yesterday.
The news raised expectations of a third round of quantitative easing
QE III as it is tagged which would inject millions of dollars into the US financial system, lifted stocks on Wall Street. The Dow Jones gained 89.2 points, or 0.7 per cent, to 13,090.7.
The local market shot out of the opening gates, with a helping hand from the mechanics of the stockmarket: it was "options expiry day" on the ASX, a day when all equity options for the month of April became void.
"We think there were some buy-on-open type orders that got filled in pretty quickly," said EL & C Baillieu Stockbroking director Richard Morrow.
"Some big investing institutions have mandates that if they buy or sell any stock they have to do it at the start or end of the day, and we think that happened [in the morning]."
But after the initial spate of buying, the market slipped, giving back more than half its early gain. The S&P/ASX 200 Index closed up 14.8 points, or 0.3 per cent,
Among the sectors, financials rose 0.5 per cent and industrials gained
0.6 per cent while materials ended flat. Telcos jumped
1.1 per cent but the gold
sub-index lost 1.8 per cent.
Television stocks continued to be pummelled after Seven West Media cut its earnings forecasts.
Earlier in the week Seven had said that, despite expecting a pick-up in the advertising market, conditions had not improved. It lowered its earnings forecast for
the financial year to $460-$470 million. The market had been expecting full-year earnings of about
$520 million.The stock tumbled 86?, or 22.8 per cent, to $2.91, pulling other media stocks with it.
Southern Cross shares were 4.1 per cent lower at $1.31 and Prime Media was down 2.7 per cent at 72?. Fairfax Media fell 2? to 70? while Ten Network was steady at 81.5?.
Telstra shares gained 4?
to $3.51, the highest since August 2009.
Leighton Holdings gained 10? to $20.28 after its Middle East operation part of a joint venture was awarded a $US169 million contract for work on a mine in Saudi Arabia.
Shares in property developer Lend Lease
closed unchanged at $7.35 after it said fraudulent activities that prompted a legal investigation into an arm of the company in the US had ceased.