RTTNews - The Australian stock market edged higher on Tuesday after opening slightly down from the unchanged line, but faltered subsequently due to selling in energy and materials stocks.
Bank and healthcare stocks are mostly trading higher. Utilities, consumer staples and telecommunications stocks are also seen trading firm. With the Reserve Bank of Australia scheduled to come out with its decision on interest rates today, the mood is quite cautious in the market.
The benchmark S&P/ASX 200 index is currenly down by 13.4 points at 3,770.3. The broader All Ordinaries index is trading lower by 14.5 points at 3,769.7. On Monday, the S&P/ASX 200 index had ended at 3,784, recording a loss of 44.50 points, or 1.16%. The All Ordinaries index ended the day with a loss of 42.40 points, or 1.11%, at 3,784.
Materials stock Rio Tinto is down by over 2%. BHP Billiton is trading lower by 1.2% and Newcrest Mining is down with a loss of 0.5%. Fortescue Metals and Lihir Gold are down by 2.6% and 0.6% respectively. However, bucking the trend, Orica is up with a modest gain.
Energy majors Woodside Petroleum and Santos are trading with sharp losses. In the banking space, ANZ Bank, Commonwealth Bank, National Australia Bank and Westpac are trading higher by 0.3%-1.2%. Diverisified financial stock Macquarie Group is up by around 1.7%.
ABB Grain has downgraded its 2009 full year earnings guidance by up to 32% due to difficult market conditions. ABB said its guidance for 2009 full year net profit after tax is now between A$43 million and A$53 million, down from a range of A$53 million and A$63 million issued in May. The ABB Grain stock is down by nearly 4% now.
Meanwhile, Centrebet, the online betting agency, expects strong profit growth in fiscal 2010 after upgrading guidance for the current year. The firm said it expects adjusted net profit in fiscal 2009 at the upper end of its earlier guidance of A$10 million to A$11 million. Centrebet expects the fixed odd management contracts with TAB and new cost controls to boost 2010 profit. The stock is trading nearly 4.5% up over its previous close.
In economic news, a report from the Australian Industry Group/Housing Industry Association revealed that the Australian construction index continued to slide as building and construction activity weakened for a 16th straight month as firms grappled with delayed projects and difficult credit conditions. The performance of construction index, or PCI, fell by 4.3 index points in June to 42.6 points. The index has been below the 50 level, which separates expansion from contraction, since March 2008.
In the currency market, the Australian dollar opened higher this morning with the positive close on Wall Street lifting the currency towards US$0.8000. In early trading, the Aussie was quoted at US$0.7973/77, up sharply from Monday's close of US$0.7910/14. The Australian dollar is currently trading at 0.7965 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Japan is down in the red. The New Zealand, Singapore and Korean markets are
trading modestly higher.
On Wall Street, stocks rallied after trading in the red for most of the session on Monday. Traders shrugged off a report from the Institute for Supply Management which showed that activity in the service sector contracted for the ninth consecutive month in June, although at a slower pace than economists had been expecting.
The Dow closed up by 44.13 points or 0.5% at 8,324.87 and the S&P 500 rose by 2.30 or 0.3% to 898.72. However, the tech-heavy Nasdaq finished down by 9.12 points or 0.5% at 1,787.40.
The stock markets in the Asia-Pacific region had ended Monday's session mostly lower. Japan's benchmark Nikkei 225 Index closed down by 1.4%, while Hong Kong's Hang Seng Index slipped by 1.2%.
Major European markets also saw notable weakness on the day, with the German DAX Index and French CAC 40 Index both finishing down 1.2%. The U.K.'s FTSE 100 Index also fell, posting a loss of 1% for the day.
Crude oil fell sharply to its lowest levels in nearly two weeks in the New York Mercantile Exchange on concerns over the slow pace of global economic recovery following weak labor data from the U.S. Light sweet crude for August delivery lost US$2.68 to close at US$64.05 a barrel as trade resumed after a three-day holiday weekend in the United States.
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