The Australian stock market rallied higher at the start but has slipped into the negative zone due to a fairly strong round of selling in materials, consumer staples, information technology and industrials stocks. Energy, bank, utilities, financial and consumer discretionary stocks are trading higher.
The benchmark Australian index S&P/ASX200, after an early rise to 3761, is trading at 3752 now, down 15.3 points from its previous close. Elsewhere in Asia, the Japanese market has also slipped after a positive start. The Japanese stock market had opened on a steady note this morning following gains on Wall Street on the back of encouraging results from General Electric and Citigroup.
Top materials stocks in Australia, namely BHP Billiton, Rio Tinto, Newcrest Mining, Incitec Pivot and Lihir Gold are trading lower with sharp losses.
On the other hand, Commonwealth Bank of Australia, National Australia Bank, ANZ Bank and Westpac Banking Corporation are up in the green with gains.
In the currency market, the Australian dollar is trading at 0.7182 to the U.S. dollar, down more than 1% from its last closing level.
With a few top-notch companies scheduled to announce their earnings during the next couple of days, participants appear to be opting for a cautious path this morning.
Most of the markets in the Asia-Pacific region had closed on a positive note on Friday last despite some heavy profit taking in late trading.
Wall Street will be busy assessing report cards this week, as the season springs forward. IBM, Coca-Cola, Yahoo, Apple, Microsoft are among the conglomerates scheduled to report during the course of this week. Armonk, New York-based technology giant International Business Machines Corp. is set to report first quarter results on April 20.
Bank of America, Boston Scientific Corp., Eli Lilly & Co, Texas Instruments Inc., Halliburton Co and Weatherford International Limited are among the other big ones scheduled to announce their quarterly results today.
On Friday, Wall Street ended with marginal gains with traders digesting the latest batch of earnings news. General Electric reported earnings from continuing operations of $0.26 per share, down from $0.43 per share in the previous year, but were better than the 21 cents per share consensus estimate.
Citigroup reported a loss of $0.18 per share as against expectations of a loss of $0.34 a share. Last year, the financial powerhouse had reported a loss of $1.03 per share.
On the economic front, the Reuters/University of Michigan's consumer sentiment index for April rose to 61.9, a substantial increase from the previous reading. Analysts had expected the index to rise to 58.5 from 57.3 in March.
In other news, Federal Reserve Chairman Ben Bernanke delivered a speech earlier in the day in which he offered his support to financial innovation, despite the fact that some of these new products have contributed to the current economic crisis.
Bernanke argued that increased regulation would be a better response than eliminating innovation. The Fed chief noted that while financial innovation can misfire, more often the benefits outweigh the downside.
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