The sharemarket dived yesterday after National Australia Bank's
disappointing earnings sparked a sell-off in the banks.
Despite a strong night on Wall Street, the ASX 200 fell 37.50 to 3038 and the
All Ordinaries fell 34.10 to 3001.90, with 47,500 trades worth $2.06 billion
pushed through the market in 2 1/2 hours.
Trading volumes were unaffected by a technical glitch which closed the
Australian Stock Exchange for 3 1/2 hours.
Dealers said they managed to process their orders in the 2 1/2 hours before
US markets extended their gains on Wednesday night after the Federal Reserve
cut interest rates by a bigger-than-expected 50 basis points to stimulate
The Dow Jones rose 92.7 to 8771, the S&P 500 gained 8.4 to 923.8 and the
Nasdaq Composite was up 17.8 to 1419.
AMP Henderson Global Investors economist Simon Doyle said the decision had
``evaporated" any chance of the Reserve Bank of Australia tightening interest
rates in the near future.
``Deep down the RBA may still have a slight bias to tighten, given the
resilience of the domestic economy, but the uncertainty over the global outlook
would need to lift quickly for the RBA to respond. This seems unlikely,
suggesting policy on hold for some time," Mr Doyle said.
NAB dived $1.84 to $32.02 with more than 8 million shares changing hands,
after disappointing investors with a lower-than-expected earnings result and
reduced guidance for earnings per share growth, said JB Were's head of
institutional sales, Basil McIlhagga.
``Lowering their guidance seemed to be the catalyst for the selldown in the
share price. The dividend not being 100 per cent fully franked was probably a
surprise to a number of people in the market," Mr McIlhagga said.
``In this market even if it is only a small disappointment the market will
Among the other banks, CBA fell 70c to $27.67 as investors continued to
punish the bank following its recent profit warning, Westpac fell 29c to $14.20
and ANZ fell 3c to $18.89.
St George rose 14c to $18.60 after its strong full-year result on Wednesday.
News Corp gave up some of Wednesday's gains following its exceptional
first-quarter earnings, falling 56c to $11.75. Dealers said the media group fell
after the stock's uninspiring performance in the US overnight.
Computershare dived 37c to $1.93 after the share registry group shocked
investors with a warning that first-half profit would fall 25 per cent.
The shares have fallen $3.76 since January.
Qantas bounced back following Wednesday's announcement that rival airline
Virgin Blue had sealed a deal to use the former Ansett terminal at Sydney
Airport. Shares in the flying kangaroo rallied 7c to $3.88.
Patrick Corp, which holds a stake in Virgin, fell 20c to $14.01, while
Macquarie Airports Group, which holds a stake in Sydney Airport, closed steady
Lion Nathan rose 3c to $5.41 on expectations of double-digit earnings growth
in the current financial year.
Rises 418 Falls 503 Steady 291
Dec SPI 3054.0 -22.0
ASX 200 3038.9 -36.6
Biz.com Tech 775.7 -47.3
Industrials 3602.6 -20.3
Energy 3971.5 +12.7
Volume Value 439.6m 2.113bn
Challenger Int +13.10%
Lihir Gold +5.22
SPC Ardmona +4.27
Grand Hotel Grp +3.51
Oil Search +2.99
Croesus Mining +2.70
Sons of Gwalia -6.85
News Corp -4.55
Novus Petroleum -4.17
Billabong Int -3.81
Burns Philp & Co -3.45
Toll Hldgs -3.43
News Corp-PFD -3.30
Orbital Engine -2.94