RTTNews - The Australian stock market ended flat on Wednesday led by a late rally in mining stocks following unconfirmed news that China has scaled down the price cuts for iron ore from suppliers to 33% from its earlier stance for a 45% cut in prices. Positive economic data on consumer confidence and home loan approvals also helped the markets rally in late trading after meandering in negative territory during early trading amid concerns about global recovery.
In the U.S., s stocks ended in negative territory following a sharp decline in commodity prices in a late reaction to the acknowledgment by Vice President Joe Biden in an interview on Sunday that the Obama administration misread the economy. The uncovering of yet another Ponzi scheme by the SEC involving Dallas businessmen to the tune of $485 million also unsettled the investors.
Moderately strong demand for the Treasury's auction of $35 billion worth of three-year notes earlier in the day had little impact on trader sentiment, as they preferred to lock-in gains in a late sell-off and moved to the sidelines amid expectations for yet another stimulus package from the U.S Government. Technology, energy and oil stocks took the beating amid concerns about slackening demand and bleak future. The dollar continues to weaken against the Japanese Yen, while it strengthened against the euro and the pound.
The Dow fell 161.27 points or 1.9% to 8,164, the Nasdaq closed down 41.23 points or 2.3% at 1,746, and the S&P 500 dropped by 17.69 points, or 2% at 881
The All Ordinaries Index opened unchanged from its previous close at 3,768 and drifted into negative territory following weak cues from Wall Street where traders sold-off in late trading amid economic concerns. However, positive news from China on iron ore prices as well as economic reports helped stage a rally led by miners and banks. The index almost recovered all of its losses and ended with a minor loss of 1.80 points, or 0.05% at 3,766. The benchmark S&P/ASX 200 Index, albeit following a similar trend, just managed to squeeze in to positive territory and ended with a gain of 1 point, or 0.03% at 3,768.
On the economic front, survey results released by the Westpac Bank and Melbourne Institute revealed that Consumer sentiment in the country increased by 9.3 percent in July compared to June. The July index reading advanced to a seasonally adjusted 109.4, its highest level since December 2007. The Australian Bureau of Statistics revealed that number of loans issued for new housing increased in May by 2.2% over April. The Bureau said loan approvals to build houses was up a seasonally adjusted 8.0% on month in May, approvals to purchase newly built homes were up 2.9%, and the number of approvals to purchase existing houses was up 1.5%.
Light sweet crude oil price for August delivery ended at $62.12, representing a loss of $0.81 a barrel in Asian trading, after having shed about $1.13 a barrel in the previous session to $62.93 a barrel on concerns about weak demand.
Mining stocks advanced following news in a Chinese Website which revealed that China scaled down its demand for cut in iron prices to 33% as against its earlier demand for a deeper 45% cut. Rio Tinto gained 1.80%, Fortescue Metals added 2.60%, Macarthur Coal advanced 5.16%, and Minara Resources surged 6.12%. BHP Billiton, however, ended in negative territory with a loss of 0.34%.
Financial stocks advanced on hopes of recovery following positive economic data. ANZ Bank jumped 2.62%, Commonwealth Bank Australia added 0.73%, National Australia Bank gained 1.93% and Westpac Banking edged up 0.10%.
Qantas Airways declined 2.37% following report that demand for premium seats in its flights has declined considerably in comparison with coach class seats due to slowdown in the global economy.
Gold stocks declined on lower bullion prices. Lihir Gold lost 1.05%, Newcrest Mining fell 1.96% and Sino Gold declined 1.82%.
Oil stocks declined following downward slide in crude oil prices in international market. Woodside Petroleum edged down 0.67%, Santos lost 1.97% and Oil Search fell 2.23%.
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