Australian Market Pares Early Gains

 

 

After moving higher in early trading Monday on positive cues from Wall Street, the Australian stock market has pared gains and is trading flat now with investors choosing to tread cautiously and indulging in some selling at a few front line counters in industrial, healthcare and consumer staples sectors.

Energy and material stocks are also off their higher levels due to strong resistance, while financials are finding some support.

The benchmark S&P/ASX 200 index, which rose to 4,343.6 after a positive start, is currently trading at 4,306.5, up 1.1 points over its previous close. The broader All Ordinaries index is up 5.2 points at 4,331, well off the day's high of 4,363.2.

On Friday, the S&P/ASX 200 index fell to a 10-month low of 4,176 in early trading before ending down 11 points or 0.26% at 4,305, its lowest closing since Aug 21,2009, while the All Ordinaries index settled at 4,325.8 with a loss of 16.6 points or 0.38%.

Among key bank stocks, ANZ Bank is up 2.2%, Commonwealth Bank of Australia is up with a gain of 1.2%, National Australia Bank is gaining about 1.6% and Westpac Banking Corporation is up 1%.

Among top miners, BHP Billiton is gaining 1.4% and Rio Tinto is up 1.6%, while Newcrest Mining has pared its early gains and is up just marginally at present.

Bluescope Steel, Fortescue Metals and Incitec Pivot are down with modest losses, while Orica is down 1.75%. Lihir Gold is up marginally.

In the energy space, Woodside Petroleum is gaining nearly a percent, while Santos and Oil Search are up marginally. Origin Energy is down with a loss of 1.5%.

Sigma Pharmaceuticals Ltd announced that a takeover approach made last week came from Aspen Pharmacare Holdings Ltd. The company said the board is considering the proposal and has asked shareholders not to take any action at this stage. The stock is currently up over 2% on its previous closing price.

Meanwhile, private hospitals operator and pathology provider Healthscope Ltd has announced that it will allow a private equity consortium to conduct due diligence on the company subject to the parties agreeing on a confidentiality agreement. Healthscope said last week it had received a takeover proposal of A$5.75 per share, which valued the company at about A$1.82 billion, from a private equity consortium. The proposal was up from an earlier bid of A$5.50 a share from the same consortium. Healthscope shares are trading flat.

In the currency market, the Australian dollar opened higher and was quoting at US$0.8315-US$0.8317 in early trades, up 0.51% from Friday's close of US$0.8272-US$0.8275. The Australian dollar is currently trading at 0.8198 to the U.S. dollar.

Among other markets in the Asia-Pacific region, New Zealand, Singapore and Taiwan are trading notably higher, while Shanghai, Malaysia, Japan and South Korea are trading weak. Markets across the region ended on a weak note on Friday.

On Wall Street, stocks ended notably higher on Friday, driven by bargain hunting that took place after the Nasdaq and the S&P 500 dropped to sharply lower levels in early trading. The major averages all closed firmly higher after another volatile outing, bouncing off of the three-month closing lows set on Thursday.

The Dow advanced by 125.4 points or 1.3% to 10,193.4, the Nasdaq jumped 25 points or 1.1% to 2,229 and the S&P 500 moved up 16.1 points or 1.5% to 1,087.7.

Major European markets closed modestly lower on Friday, although well off their worst levels. The French CAC 40 index and the U.K. FTSE 100 index edged down by 0.1% and 0.2% respectively, while the German DAX index ended 0.7% down.

Crude oil prices fell on Friday on concerns over the European debt crisis, the sustainability of the U.S. economic recovery and the strengthening U.S. dollar. Light, sweet crude for July delivery settled 76 cents down at US$70.04 a barrel.