Australian share prices closed little changed on Monday as investors got jittery over signs of rising inflation and weaker commodity prices, dealers said.
While there was an early flurry of interest in the eight-billion-dollar share offering of telco giant Telstra, the market sagged in the absence of any strong lead from offshore markets, they said.
With a US Federal Reserve meeting on interest rates later this week there was little incentive to take any aggressive positions, especially after wholesale inflation figures pointed to a local rate hike next month. The benchmark SP/ASX 200 fell 1.9 points to 5,333.5 while the All Ordinaries Index slipped 0.7 points to 5,303.7.
Turnover was 1.25 billion shares worth 3.85 billion dollars (2.92 billion US), with falls leading gains 576 to 558 and 342 stocks unchanged. "Telstra started off strongly but waned a bit in the afternoon - there was some talk that there may have been over-orders," said Ric Klusman, head of institutional trading at Aequs Securities.
Producer price inflation (PPI) data added to the case for the central bank to raise interest rates next month from the current six-year high of 6.0 percent, dealers said. But while that data dampened the market, it failed to spark a sell-off, with take-over activity and speculation keeping investor sentiment afloat.
Aequs Securities head of institutional trading Ric Klusman said interest focused on special situations, with Telstra in the spotlight as the government launched the retail investor tranche of its share sale.
Telstra was down 0.02 dollars at 3.61 dollars while SingTel gained 0.07 to 2.02. Firmer banks helped support the market overall, with Commonwealth Bank of Australia up 0.64 or 1.38 percent to 47.09 after the bank made a solid start to its fiscal year to June 2007 during the three months to September.
National Australia Bank gained 0.06 to 37.66 while Westpac added 0.05 to 23.58 but ANZ eased 0.02 to 28.21. Suncorp-Metway fell sharply on doubts that it will extract sufficient value from its planned 7.9 bln aud take-over of general insurer Promina which some analysts suggest will be earnings dilutive.
At the same time, Klusman said speculation that Westpac will be launch a counter bid for Suncorp is fading, adding to the downward pressure. Suncorp plunged 1.29 or 5.68 percent at 21.41 while Promina gained 0.13 or 1.91 percent to 6.92.
The big miners were mixed with BHP Billiton edging 0.13 dollars higher to 27.88 and rival Rio Tinto shedding 0.22 cents to 77.05. Australia's largest supermarket operator Woolworths fell 0.17 to 20.55 and Coles Myer shed 0.15 to 13.40.
Comments
Comments are closed.