MELBOURNE Nov 14 Australian shares dipped to
fresh seven-week lows on Wednesday as investors trod carefully
after the market's sudden drop this week.
By 0014 GMT the benchmark S&P/ASX 200 index was up
0.1 percent or 4 points, though gains in top miners, banks and
defensive stocks such as Telstra Corp were offset by
weakness in gold producers and energy firms.
A successful bond auction in Greece lent some support. But
investors are increasingly nervous the looming U.S. fiscal cliff
will hit economic growth and could even tip the world's largest
economy into recession. That could in turn reduce growth in
China, Australia's biggest export market.
Credit Suisse equity strategist Damien Boey told Reuters the
onus was now on policymakers, but economic theorists were
divided between whether austerity and stimulus were best to
solve their debt and growth dilemmas.
"It's really a case of picking the dog with the least fleas.
It's a really unenviable task leading a country like (U.S.
President Barack) Obama has chosen to do," Boey said.
"People are saying that if all that's going to happen is
we're going to kick the can down the road and in another six
months or a year we're going to face exactly the same situation,
well I don't like that future. So there's a big change in
sentiment (toward stimulus)," he said.
Boey said Australia had not kept pace with changes in other
large economies since the global financial crisis and the nation
faced "accumulated risk" and was "behind the curve."
"That's why our market has underperformed. It's ironic that
we have the superior (economic) growth but we have the worst
sharemarket performance, precisely because there hasn't been any
(economic) adjustment here," he said.
The benchmark S&P/ASX 200 index was up 4.2 points at
4,383.8 by 0013 GMT.
It earlier fell to 4,372, its lowest since Sept. 28. It
dropped 1.5 percent to 4,379.8 on Tuesday.
"In the short term, the name of the game is closing above
the psychological 4,400 mark," said Ben Le Brun, analyst at
New Zealand's benchmark NZX 50 index fell 0.3
percent to 3,960.2. New Zealand retail sales volumes fell a
seasonally adjusted 0.4 percent in the September quarter, 30,
against expectations for a rise of 0.5 percent.
STOCKS ON THE MOVE:
* Fairfax Media rose 4 percent to A$0.40 after it
sold its United States rural media business for $US79.9 million
to Penton Media..
* CSR rose 4.2 percent to A$1.62 after reporting
net profit for the half year of A$20.4 million. CSR said it saw
some encouraging signs of a recovery in housing construction
beyond the current year.
* BHP Billiton rose 0.2 percent to A$33.81 after it
agreed to sell its Canadian EKATI diamond operation to Harry
Winston for $500 million. BHP has been narrowing its
portfolio to focus on larger, long-life assets.
"I still worry about the resources stocks. I'm not sure
we've seen the worst of the slowdown behind us in China. The
whole bottoming argument in China is still predicated on the
U.S. and Europe being okay," said Boey.
* Lynas shares were placed on trading halt pending
a court announcement in Malaysia regarding its controversial
rare earths plant.
(Reporting by Miranda Maxwell; Editing by Eric Meijer)