Reuters logo
Australia shares ease, but pares losses as c.bank holds cash rate
February 5, 2013 / 5:45 AM / in 5 years

Australia shares ease, but pares losses as c.bank holds cash rate

(Adds details, comments)
    SYDNEY, Feb 5 (Reuters) - Australian shares eased 0.5
percent on Tuesday after discouraging U.S. factory orders hit
Wall Street and political ructions in Spain and Italy spurred
profit-taking but the Australian central bank's decision to keep
interest rates on hold helped to trim losses.
    Australia's central bank kept its main cash rate steady at a
record-matching low of 3.0 percent on Tuesday, but said a benign
inflation outlook meant there was scope to ease policy further
if needed. 
   "The effect of this on the ASX 200 was a rally off the lows
as some of the banks turned positive," said Stan Shamu, market
strategist at IG Markets.
    Banks were mostly weaker. Westpac Banking Corp 
slipped 0.1 percent and the Commonwealth Bank of Australia
 fell 0.6 percent. National Australia Bank 
posted a loss of 0.9 percent. Australia New Zealand Banking Corp
 bucked the trend, rising 0.4 percent.
    "Lower rates make our high yielding banks look more
attractive as a quasi-bond play. Although the local market is
still down, it is outperforming the region."
    The S&P/ASX 200 index finished the day 24.8 points
lower at 4,882.7. The benchmark index hit an intraday high of
4,951 but ended down 13.6 points at 4,907.5 on Monday. 
    "Nervous investors who have made recent gains in equities
are keen to hold onto these hard earned wins," said Ben Taylor,
sales trader at CMC Markets.
    "It seems every man and his dog is now calling for a
sell-off before domestically we continue to climb the wall of
worry."
    Oil miners also finished the session weaker. Woodside
Petroleum dropped 1.6 percent while Santos Ltd 
lost 0.9 percent.
    Global iron ore miners also finished the day weaker, with
BHP Billiton Ltd slumping 1.7 percent and rival Rio
Tinto Ltd tumbling 1 percent.
    A corruption scandal in Spain and polls showing Italy's
former Prime Minister Silvio Berlusconi regaining ground before
elections this month triggered fresh concern over potential
threats to euro zone stability and growth. 
    Wall Street stocks slid on Monday, giving the S&P 500 its
worst day since November, as renewed worries about the euro zone
crisis caused the market to pull back from recent gains. 
     "If China continues to stabilise, the U.S. continues to
improve, and the news out of Europe provides a glimpse of
confidence, we will continue to see money flowing out of cash
and bonds and into equities as investors get paid to take on
risk," said Taylor. 
    New Zealand's benchmark NZX 50 index finished 0.8
percent or 34.5 points lower, ending the day at 4,212. 


 (Reporting by Thuy Ong; Editing by Jacqueline Wong)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below