The week ahead with Michael Pascoe
A short week for our markets but an important one with inflation figures to set up next week's RBA board meeting.
Australian shares ended flat with only gold stocks offering any glitter in an otherwise lacklustre trading day.
The benchmark S&P/ASX200 index was down just 1.5 points at 4880 points, while the broader All Ordinaries index lost 0.2 points, or less than 0.1 per cent, to 4913.3 points.
Materials stocks were up 0.1 per cent, industrials gained 0.6 per cent and the financial sector ended flat. Gold stocks, though, added 1.3 per cent.
What you need to know
The Australian dollar was buying 92.68 US cents
Asian shares retreated as chip makers sagged
Gold futures were little changed at $US1155
Oil futures eased to below $US84 a barrel
Dow futures were up 11 at 11,162
Patersons Securities associate director John Curtin said bank stocks were dragged down after the Australian Bureau of Statistics said the producer price index rose 1.0 per cent during the March quarter.
‘‘The market was looking for 0.6 per cent, so we’ve seen the major banks fall on the back of that news which could force the RBA (Reserve Bank of Australia) to continue to hike rates higher than what have been forecast in recent weeks,’’ he said.
‘‘This PPI number will put interest rates rises back on the agenda because that (PPI) will lead to inflation.’’
Westpac led the major lenders down, losing 12 cents, or 0.44 per cent, to $27.18, while Commonwealth Bank gave up five cents to $58.15 and ANZ Banking Group fell three cents to $25.17.
National Australia Bank bucked the sector trend, adding 20 cents, or 0.71 per cent, to $28.45.
Trading in the major banks is quiet ahead of their first-half 2010 earnings reports due for release from Thursday, Mr Curtin said.
Mr Curtin said the biggest mover among large cap stocks was CSL Ltd, which fell $1.44, or 4.24 per cent, to $32.50 after saying last Friday that it would not be changing its earnings guidance.
‘‘The market is willing to bet short term that maybe there is a downgrade coming,’’ Mr Curtin said.
Asian drag
Macquarie Private Wealth adviser Helen Spencer said the trading in the resources sector was tempered by weaker equity markets in Asia despite stronger commodity prices overnight.
``Certainly taking the wind out of the sails of the sector was Asia, which opened up in negative territory,'' she said.
Other issues such as the Henry Tax Review, due for release on Sunday, and how China's slowdown will be orchestrated will see lacklustre trading in that sector, she said.
BHP Billiton firmed three cents to $42.00, while rival Rio Tinto lost five cents to $76.40.
Gold stocks were the standout performers. Lihir Gold firmed two cents to $3.97, while Newcrest Mining gained 32 cents, or 0.94 per cent, to $34.52 and Kingsgate Consolidated Ltd added 24 cents, or 2.77 per cent, to $8.91.
The spot price of gold in Sydney was trading at $US1152.70 by 1643 AEST, up $US11.25 on Friday's closing price of $US1,141.45.
Among retailers, grocer giant Woolworths gained nine cents to $26.91 and Wesfarmers - owner of Coles supermarkets - slipped 19 cents to $29.90.
Department store owners made gains, with David Jones up 13 cents, or 2.81 per cent to $4.75 and Myer Holdings Ltd firming five cents to $3.21.
Major media stocks were mostly stronger, with Fairfax Media firming one cent to $1.76, News Corporation up nine cents to $19.95 and its non-voting scrip gaining 19 cents to $17.42.
Airlines were mixed, with national carrier Qantas firming two cents to $2.91 and Virgin Blue Holdings fell 2.5 cents to 58 cents.
Paper merchant PaperlinX fell 2.5 cents, or 3.05 per cent, to 79.5 cents, while Gunns gained two cents, or 3.81 per cent, to 54.5 cents following the company's announcement on Friday of a restructure and new annual earnings guidance.
Resource Mining Corporation was the top traded stock by volume, with 89.6 million shares traded for $456,356.Resource Mining's shares firmed 0.1 cents, or 20 per cent, to 0.6 cents.
Preliminary national turnover reached 2.43 billion shares, worth $6.26 billion, with 539 stocks, 564 down and 376 steady.
On the Sydney Futures Exchange, the June share price index contract was 23 points lower at 4,884 on a volume of 28,514 contracts.
More to come
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AAP, with BusinessDay
