Australian Market Drifts Lower On Wall Street Cues, Economic Data

By RTT News, 
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(RTTNews.com) - The Australian stock market is drifting lower on Wednesday with the overnight weak close on Wall Street and a decline in iron ore prices hurting sentiment. A weak reading on Australian consumer sentiment in May is also contributing to the decline.

Mining, energy, consumer discretionary, industrial and financial stocks are trading notably lower.

The benchmark S&P/ASX 200 index is down 44.8 points or 0.8 percent at 5,375.6. The broader All Ordinaries index is at 5,357.1, down 44.6 points or 0.8 percent from its previous close.

In the banking space, ANZ Bank, Commonwealth Bank of Australia, National Australia Bank and Westpac (WBK) are down 0.6 to 0.8 percent. Bendigo & Adelaide Bank and Bank of Queensland are also trading notably lower.

Among top miners, BHP Billiton (BHP) is losing about 1.6 percent, Rio Tinto (RIO) is declining 1.8 percent and Newcrest Mining is lower by 0.5 percent, while Fortescue Metals is down 4.5 percent.

In the energy sector, Woodside Petroleum is down 1 percent. Woodside Petroleum has announced that it has terminated its agreement to take a stake in a $2.7 billion natural gas project in Israel.

Santos, Origin Energy and Caltex Australia are lower by 0.8 to 1.1 percent, while Oil Search is in positive territory, gaining over 1 percent.

Spark Infrastructure is losing about 5 percent after the company announced the completion of the A$200 million placement to institutional securityholders associated with the acquisition of a 14.1 percent interest in Duet Group.

Adelaide Brighton and REA Group are lower by 3.7 percent and 3.4 percent, respectively. JB Hi-Fi, Downer EDI, Leighton Holdings, WorleyParsons, ALS, Arrium and Beach Energy are down 2 to 3 percent.

On the economic front, an index measuring consumer confidence in Australia turned sharply lower in May, the latest sentiment survey from Westpac revealed on Wednesday, checking in with a score of 92.9. That's down 6.8 percent from the April reading of 99.7, and represents the lowest score since August 2011. Concerns over the proposed budget released last week were the key drag, Westpac said.

Meanwhile, first-quarter wage costs and April numbers for skilled vacancies will be out later in the day. Wage costs are expected to rise 0.7 percent on quarter and 2.6 percent on year - both unchanged from the previous three months. Vacancies dipped 0.2 percent on month in March, while the confidence index added 0.3 percent to a score of 99.7 in April.

In the currency market, the Australian dollar dropped to a three week low against the U.S. dollar. In early trades, the local unit was quoting at US$0.9242, down 0.3 percent from Tuesday's close of US$0.9271.

On Wall Street, stocks ended notably lower on Tuesday with traders reacting to disappointing quarterly results from retailers such as Staples ( SPLS ), Dick's Sporting Goods ( DKS ) and Home Depot ( HD ). Philadelphia Federal Reserve President Charles Plosser's remarks that the Fed may be required to begin raising interest rates sooner rather than later contributed as well to the market's decline.

The major averages climbed off their worst levels in late-day trading, but remained firmly in the red. The Dow tumbled 137.6 points or 0.8 percent to 16,374.3, the Nasdaq declined 28.9 points or 0.7 percent to 4,096.9 and the S&P 500 slid 12.3 points or 0.7 percent to 1,872.8.

Major European markets too closed weak on Tuesday. While the U.K.'s FTSE 100 index declined by 0.6 percent, the French CAC 40 index and the German DAX index lost 0.4 percent and 0.2 percent, respectively.

U.S. crude oil ended higher for a third straight session on Tuesday, on growing concerns of possible supply disruptions from Russia amid the prevailing geopolitical tensions in Ukraine. Nonetheless, the gains were limited with an expected build in U.S. stockpiles.

Crude for July delivery ended up $0.22 or 0.2 percent at $102.33 a barrel on the New York Mercantile Exchange.

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This article appears in: News Headlines

Referenced Stocks: DKS , HD , SPLS

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