By RTT News,
December 15, 2013, 08:34:00 PM EDT
(RTTNews.com) - After opening notably lower following a flat lead from Wall Street, the Australian market recovered on Monday, with investors indulging in some bargain hunting after recent sharp losses. However, the mood is quite cautious amid continued uncertainty about the outlook for the U.S. Federal Reserve's asset buying program.
Consumer discretionary, information technology and industrial stocks are trading higher, while financial, healthcare, mining and energy stocks are mostly trading weak.
The benchmark S&P/ASX 200 index, which declined to 5,059.7 in early trades, is currently at 5,096.5, down 1.9 points from its previous close. The broader All Ordinaries index is down 1.3 points at 5,100.2, well off an early low of 5.065.4.
Among bank stocks, Commonwealth Bank of Australia, National Australia Bank and Westpac (WBK) are down 0.3 to 0.6 percent, while ANZ Bank is up in positive territory, gaining 0.7 percent.
Bendigo & Adelaide Bank and Bank of Queensland are up 1.2 percent and 0.3 percent, respectively.
Top miners BHP Billiton (BHP) and Rio Tinto (RIO) are trading weak, losing 1 percent and 0.6 percent, respectively.
In the energy sector, Santos, Oil Search, Origin Energy and Caltex Australia are down 0.3 to 0.5 percent, while Woodside Petroleum is losing more than a percent.
UGL, Monadelphous Group and Myer Holdings are trading higher by 5 to 5.5 percent. WorleyParsons and ALS are up 4.4 percent and 4 percent, respectively. Metcash is up nearly 4 percent.
Whitehaven Coal, SP Ausnet, Qantas Airways, Incitec Pivot, APA Group and David Jones are trading higher by 2 to 3 percent. Amcor, Challenger, Adelaide Brighton and Tatts Group are also trading sharply higher.
Wesfarmers has agreed to sell the Australian and New Zealand underwriting operations of its insurance business to Insurance Australia Group for about A$1.85 billion. The sale does not include the insurance division's broking operations in Australia, New Zealand and the UK, and its Australian and New Zealand premium funding businesses which will remain part of Wesfarmers.
Wesfarmers expects a pre-tax profit of about A$700 million to A$750 million from the transaction, which will be included in the financial results for the second half of the 2014 financial year. Wesfarmer is currently trading up 0.6 percent.
Shares of construction giant Leighton Holdings are up nearly a percent on reports the West Australian government has selected Leighton and property group Mirvac to develop a 5.1-hectare land holding in the Perth CBD, which accounts for about 40 percent of the estimated A$5.2 billion City Link project. Mirvac Group shares are trading weak, losing about 0.5 percent.
Meanwhile, Beach Energy, QBE Insurance Group, Ramsay Healthcare and Cochlear are trading weak, losing 1.5 to 2.5 percent.
In the currency market, the Australian dollar opened higher against the U.S. dollar. In early trades, the local unit was quoting at US$0.8961, up 0.4 percent from Friday's close of US$0.8927.
On Wall Street, stocks ended mostly flat on Friday, after showing a lack of direction right through session, amid uncertainty about the outlook for the Federal Reserve's stimulus program.
The major averages bounced back and forth across the unchanged line before closing mixed. While the S&P 500 edged down 0.2 points or less than a tenth of a percent to 1,775.3, the Dow inched up 15.9 points or 0.1 percent to 15,755.4 and the Nasdaq crept up 2.6 points or 0.1 percent to 4,001.
Major European markets ended lower on Friday. While the French CAC 40 index dipped by 0.2 percent, the U.K.'s FTSE 100 index and the German DAX index both edged down by 0.1 percent.
U.S. crude oil ended lower on Friday, as investors mulled over the possibility of the U.S. Federal Reserve tapering its $85 billion monthly bond-buying program at its upcoming meeting scheduled next week. The possibility of excess supply was also a dampener to oil prices following reports of an increase in Libyan oil production with three ports scheduled to open this week.
Crude for January delivery ended down $0.90 or 0.9 percent at $96.60 a barrel on the New York Mercantile Exchange, after scaling a high of $97.62 a barrel intraday.
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