MARKET CLOSE (4.30pm AEDT)
The Australian sharemarket unfortunately fell for the third
straight day today with the All Ordinaries index (XAO) down 0.7
pct or 29.4 pts to 4204.2. Although today was not an ideal
session, keep in mind that shares in the U.S fell by over 2 pct
while the European markets fell by as much as 3.5 pct.
Last night global markets only extended their losses with each
passing hour while the Australian markets did the opposite. In
the first 30 minutes of trade, the XAO fell by as much as 1.5 pct
however managed to eat away at those losses for the majority of
The S&P/ASX 200 Materials index (which is a broad measure
of how the miners have performed for the day) fell by 0.99 pct or
111.2 pts to 11114.4. Australia's third largest miner RIO Tinto (
) fell 2.12 pct or $1.40 to $64.50 while the larger BHP Billiton
) eased by 0.84 pct or 30 cents to $35.60.
The S&P/ASX 200 Financials index (a measure of how the
banks and financial institutions performed) fell 0.48 pct or 18.6
pts to 3876.8. All major banks lost ground with ANZ Banking Group
(ANZ) down 1.06 pct or 21 cents to $19.54, while Commonwealth
Bank of Australia (
), Westpac (
) and National Australia Bank (NAB) all eased by around 0.3
Qantas (QAN) shares fell 4.27 pct or 7 cents to $1.57 taking
the falls for the year so far to almost 40 pct. This comes after
the airline and the workers' unions could not agree on a
compromise on working conditions leaving arbitration as the next
option. Fair Work Australia will now need to decide what takes
place from here.
Over 80 Australian companies held their Annual General
Meetings (AGMs) with shareholders today. This included internet
service provider iiNet (
) only a day after announcing that it would buy TransACT for
around $60 million. The company (TransACT) has around 150,000
customers, ended flat on the sharemarket today but gained by over
6 pct yesterday.
Shares in Japan, Hong Kong and China all lost some ground
today while South Korea's KOSPI index was one of the few to end
higher. The Tokyo Stock Exchange and the Osaka Stock Exchange
(Japan's two largest sharemarkets) said they would merge in
Last night in Europe one of the big three ratings agencies,
Moody's Investor Services said it was concerned with the high
borrowing costs for the French government in addition to a more
uncertain future in the region. France still holds the highest
possible rating of AAA.
This news comes only a week after Standard & Poor's
(another of the big three ratings agencies) announced the
downgrade of France's credit rating by error.
Borrowing costs for the French, Italian and Spanish
governments have continued to rise and are getting close to
unsustainable levels. Borrowing costs for Germany's government
has actually eased slightly.
France has around seven times greater exposure to Greece's
debt than the U.S.
No major economic data is scheduled for release in Europe
tonight. In the U.S the latest growth report will be issued prior
to the market open. Tomorrow morning, at around 6am (AEDT) the
U.S Federal Reserve's minutes will be out from their previous
monthly meeting on rates and monetary policy. This could give us
an insight into the thinking of the U.S central bank (to an
extent) when it comes to action steps needed to improve the
situation in the U.S.
Despite the significant amount of stimulus which has taken
place over the past few years (the printing of money), this has
not resulted in an improvement in the job story. The unemployment
rate is still uncomfortably high in the world's largest economy
at 9 pct.
Keep in mind that the printing of money does have its
consequences as we all know that money does not grow on trees.
The Federal Reserve however (the American version of Australia's
Reserve Bank) has the right to print as much of it as it wishes
without the need for Congress approval. This could potentially
result with in hyperinflation (the U.S dollar losing significant
value and hence prices rising). This would hurt almost all
Americans. Retirees' life savings could be worth significantly
less at no fault of their own.
The volume of shares traded came in at 2.2 billion today,
worth $5.18 billion. 281 shares were up, 697 finished weaker and
353 ended unchanged.
At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24
futures contract is up 0.02 pct or 1 pt to 4153.
Due to daylight savings, most major European markets are now
trading between 7pm (AEDT) and 3.30am (AEDT). Futures in Europe
are pointing to a slightly stronger start to trade
Dow Jones futures are currently higher, indicating that U.S
stocks could start in the black tonight when American markets
open at 1.30am (AEDT). Due to the Americans going back an hour on
November 5, U.S markets will be trading between 1.30am (AEDT) and
Turning to currencies, the Australian dollar (AUD) has lost
some ground against the greenback and buys US98.5 cents.
Steven Daghlian, Commsec Market Analyst
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