Australia shares wallow at 3-1/2 month lows, Fed anxiety holds sway
(Adds analysis, quotes, stocks on the move)
SYDNEY Dec 13 (Reuters) - Australian shares languished at 3-1/2 month lows on Friday, as more robust U.S. economic data suggested the Federal Reserve may begin reducing its monetary stimulus soon, chipping away a major support for global risk assets in recent years.
Investors, faced with few positive catalysts, were reluctant to plough funds as the year-end approached with losses in banks offset by gains in miners.
"All signs are showing that the economy isn't strong enough to support the stock market," said Biyi Cheng, head of Asia Pacific dealing at City Index, adding that close to year-end, investors will hold positions ahead of major economic news out early next year including any plans for tapering in the U.S.
The Australian economy put in another subpar performance in the third quarter as domestic demand disappointed and consumers chose to save rather than spend.
The S&P/ASX 200 index was flat at 5,063.6 by 0115 GMT, and is set to end the week 2.3 percent lower, its fourth consecutive week of losses.
Overnight, U.S. stocks dipped on solid retail sales which suggested the economy may be strong enough for the Fed to begin scaling back its stimulus program.
The Australian benchmark has taken a beating in recent weeks, falling some 400 points from the 5-1/2 year high of 5,457.3 reached on October 28 as sentiment was hit by profit downgrades, General Motors halting production in Australia and concern over Fed tapering.
Banking stocks were volatile. The Commonwealth Bank of Australia rose 0.8 percent, while National Australia Bank added 0.6 percent. Australia and New Zealand Banking Group fell 0.5 percent.
A handful of defensives fell, with top telecommunications provider Telstra Corporation Ltd down 0.5 percent, and blood products maker CSL Ltd off 0.8 percent.
Miners BHP Billiton Ltd and Iluka Resources Ltd added 0.2 percent and 2.4 percent respectively after copper and nickel hit 5-week peaks on fears that a planned Indonesian ban on ore exports could crimp supply.
A big gainer was Teranga Gold Corp, soaring 26.1 percent after the company said it expects production to be at the higher end of original guidance range of between 190,000 to 210,000 ounces.
Transfield Services Ltd rose 3.6 percent after securing contracts across its Australian and New Zealand operations worth A$240 million.
Hospitality company Silver Chef Ltd tumbled 24.8 percent to 10-month lows of A$5.58 after announcing net profit after tax for the six months to December 2013 would be 5 percent to 10 percent lower than the previous corresponding period.
New Zealand's benchmark NZX 50 index fell 0.6 percent to 4,681.3.
(Reporting by Thuy Ong; Editing by Shri Navaratnam)
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