RTTNews - The stock market in Australia ended in negative territory on Monday, led by financial stocks after the market watchdog, the Australian Securities and Investment Commission, unexpectedly lifted the ban on short selling financial stocks a week earlier than expected Friday. Weaker closing on Wall Street and successful nuclear test in North Korea also weighed on market sentiment. Resource stocks advanced limiting the losses in the market where market participants preferred to stay in sidelines as U.S and U.K markets are closed for the day.
There were no major economic data on Friday in the U.S. Traders hesitated to take positions ahead of the long Memorial Day weekend. Bargain hunting drove gains into the late afternoon, but the major averages fell uniformly heading down the home stretch. The dollar continued to take a brutal beating, as traders continued their exodus from the world's reserve currency amid speculation that the global economy is on the mend. While the broad outlook is one of optimism, lack of supporting data and mixed signals from the economy are weighing on the near-term outlook, forcing the major indices to end in negative territory.
The Dow closed lower by 14.81 points or 0.14% at 8277, the Nasdaq finished down by 3.24 points or 0.19% at 1692, and the S&P 500 slipped by 1.33 points, or 0.15%, to 887.
After opening unchanged at 3,755, the All Ordinaries Index rose in early trading to as high as 3,778 led by mining and oil stocks. However, news about the successful nuclear test in North Korea and lifting of ban in short selling of financial stocks impacted the market, which drifted into negative territory led by financials. Attempts for recovery in late trading helped limit losses with the index finally ending down by 0.54% or 20.10 points, at 3,735. The benchmark S&P/ASX 200 Index followed a similar trend and ended lower by 23.70 points, or 0.60%, at 3,738.
No major economic reports were released during the day. In a surprise development, the Australian Securities and Investments Commission announced that it was lifting the ban on covered short selling of financials, effective at the opening of Monday's trade, citing improving economic conditions as the reason. The watchdog was expected to lift ban a week later.
Financial stocks led the decline following the lifting of ban by the market watchdog. Macquarie Group is the major loser shedding 6.57%. Westpac Banking lost 3.61%, National Australia Bank slipped 2.57%, Commonwealth Bank was down 2.00% and Australia & New Zealand Bank declined 1.4%.
Mining stocks advanced following rise in metal prices. BHP Billiton advanced 1.2% and Orica gained 4.33%. Rio Tinto, however, edged down 0.06% after announcing that it is taking off its borates business from the market stating that the sales process did not achieve values acceptable to the company in the prevailing economic conditions.
Energy stocks also advanced on higher crude oil prices in the international market. Crude oil prices for July delivery ended higher on Friday at $61.67 in New York. In Asian Trading, oil prices, however, slipped and ended at $61.36, down 31 cents. Woodside Petroleum edged up 0.26%, Santos advanced 0.99% and Oil Search gained 1.37%.
Mixed trend was witnessed among the gold stocks. Lihir Gold declined 0.62%, and New crest Mining slipped 1.57%, but Sino Gold advanced 2.16%.
Among the retailers, while David Jones advanced 1.68%, Harvey Norman slipped 1.35%, Woolworths lost 0.50% and Wesfarmers declined 2.50%.
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