RTTNews - The Australian stock market slipped into negative territory on Wednesday after opening higher following the modest gains overnight on Wall Street and higher base metal prices. Banking and retail stocks are trading lower.
In early trades, the benchmark S&P/ASX 200 Index is currently down 5.70 points or 0.13% to 4,303.60 and the broader All Ordinaries Index is losing 5.20 points or 0.12% to 4,308.70.
U.S. stocks ended Tuesday's trading on a positive note amid some late session buying interest. The major averages all finished in positive territory by moderate margins, building on Monday's strong gains that helped the Nasdaq and S&P 500 indices cross key levels. The Commerce Department's report of an increase in consumer spending and the National Association of Realtors' report of a rise in pending home sales helped buoy the markets.
The Australian market closed at a nine-month high on Tuesday, a day when the Reserve Bank, as expected, left interest rates steady. The central bank also signaled that the round of interest rate reductions was likely at an end by offering a relatively upbeat outlook on the Australian economy. The benchmark S&P/ASX200 index closed with a gain of 45.9 points or 1.1% at 4,309.3 while the broader All Ordinaries index was up 43.4 points or 1.0% at 4,313.9.
On the economic front, activity in Australia's service sector reversed course and declined in July, according to survey results posted Wednesday by the Australian Industry Group and Commonwealth Bank of Australia. The group's Performance of Service Index, or PSI, declined 61 points in July to a reading of 44.1. Readings below 50.0 indicate contraction of activity in the sector. In June, the PSI rose into the positive with a reading of 50.2.
Later in the day, the Australian Bureau of Statistics is slated to release international trade data for June.
In the currency market, the Australian dollar opened higher on Wednesday after a mixed offshore session when positive U.S. pending home sales data failed to spark a sustained move higher. In early trades, the local currency was trading at US$0.8443-US$0.8449, up from Tuesday's close of US$0.8432-US$0.8455.
Mining stock BHP Billiton is adding 0.33%, drawing strength from higher copper prices, while Rio Tinto is losing 0.37%. Among gold miners, Lihir Gold is up 2.20% and Newcrest is gaining 1.28%.
In the banking space, Commonwealth Bank is down 0.34%, ANZ Bank is losing 1.23%, National Bank is declining 0.39% and Westpac is edging down 0.05%.
Oil stocks are trading mixed. Woodside is down 0.25% and Santos is adding 0.48%, while Oil Search is unchanged.
In the retail sector, David Jones reported a 0.6% increase in sales for the fourth quarter and said it continues to look forward to an 8%-12% rise in profit for the full year. Sales for the three months ended July 25 totaled A$512.3 million, up from A$509.1 million in the year-ago period. On a like-for-like basis, sales were down 1.2% in the latest quarter. However, the company stock is down more than 5%.
Meanwhile, shares of Harvey Norman are down almost 3%, Woolworths is losing 0.04% and Wesfarmers is down almost 1%.
Insurer AXA Asia Pacific almost tripled its profit for the first half of the year and said its long-term growth prospects remain strong, mainly because of its investment earnings in Asia. Net profit for the six months to June 30 rose 187% to A$270.4 million from A$94.2 million in the year-ago period. The company's stock is up almost 3%.
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