RTTNews - The Australian market opened on a negative note on Thursday with weak cues from Wall Street triggering a strong round of selling in financial and consumer staples stocks. Energy stocks are mostly trading higher while the materials, industrial and healthcare sectors are seeing stock specific action.
The Australian benchmark index S&P/ASX 200, which opened near the unchanged line and dropped down to around 4,058 staged a recovery of sorts subsequently, but faltered again amid heavy selling in some front line stocks. The index is currently trading at 4,047.7, down 20.8 points or 0.5% from its previous close. The broader All Ordinaries index is down by 15.3 points or 0.4% at 4,053.6.
On Wednesday, the S&P/ASX200 index advanced 17.8 points or 0.4% to close at 4,068.5 while the All Ordinaries index ended up 20.6 points or 0.5% at 4,068.9.
In the banking space, ANZ Bank is currently down with a modest loss. Commonwealth Bank of Australia and Westpac Banking Corporation are trading modestly higher.
National Australia Bank, however, is down sharply by 4.8%. The bank announced it has raised A$2 billion in an international share placement that was well oversubscribed. The bank had placed 93,023,256 of new shares at A$21.50, compared with its share price of A$23.58 when the placement was announced. The bank reiterated that the capital raising will raise its Tier 1 capital ratio to 8.8% as at June 30. The bank will now proceed to a retail component of its capital raising, seeking A$750 million from investors.
Among materials stocks, Rio Tinto, Bluescope Steel, Newcrest Mining and Onesteel are trading higher by 1%- 3.5%. BHP Billiton is down 0.8% and Fortescue Metals is trading flat.
Oil and gas explorer Petsec Energy's production fell 42% in the three months to June 30, 2009 compared to the same period last year. Due to lower production and lower average gas equivalent sales price received in June, company's net revenue fell to A$17.9 million, down 51% from the previous corresponding period. However, the company has announced that it is on track to meet its production target of seven billion cubic feet of natural gas equivalent for the year 2009. The company's stock is down by over 7% this morning.
Santos Ltd's revenues fell 35% in the first quarter of the current financial year due to plunging oil prices. According to the latest quarterly report released by the company today, production in June quarter was 13.4 million barrels of oil equivalent, down 4% on the same period in 2008. Revenues plunged 35% to A$484 million. The stock is currently trading flat.
Other energy majors Origin Energy and Woodside Petroleum are also hovering around their previous closing prices.
In the currency market, the Australian dollar opened flat this morning following a weak close for equities on Wall Street. In early trading today, the Aussie was quoting at US$0.8155/61 against Wednesday's close of US$0.8159/62. The Australian dollar is currently trading at 0.8171 to the U.S. dollar.
Among other markets in the Asia-Pacific region, New Zealand and Singapore are trading higher, while Japan and Korea are down in the red with modest losses. Markets across the region had turned in a mixed performance on Wednesday. Japan's benchmark Nikkei posted a 0.7% gain, while Hong Kong's Hang Seng index drifted down by 1.3%.
On Wall Street, stocks ended weak on low volumes on Wednesday amid mixed reaction to earnings reports. In economic news, the Federal Reserve Chairman Ben Bernanke reiterated that the U.S. economy is showing signs of stabilization, although he noted that the economy is still in a fragile state, with unemployment high and consumer spending shaky.
The Dow fell 34.68 points or 0.4% to 8,881.26 while the Nasdaq ended up 10.18 points or 0.5% at 1,926.38. The S&P 500 slipped by 0.51 points or 0.1% to 954.07.
Major European markets closed modestly higher, with the German DAX Index and the U.K.'s FTSE 100 Index finishing up by 0.5% and 0.3% respectively. The French CAC 40 index ended almost unchanged.
Crude oil prices dropped for the first time in six sessions amid uncertain trading on the first day with September as the front-month contract. Investors mulled data released by the Energy Information Administration on weekly inventories. Light sweet crude for September delivery closed at US$65.40 per barrel, down 21 cents on the session. Prices rose to a high of US$65.77, but later fell to US$65.35.
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