Sunday, January 15, 2012

Australian Share Market Up 0.4 percent

A two percent rise was seen in the Australian shares as it closed this week. This was after the yields on government debt issues by Italy and Spain had fallen to their lowest. A total of 10 billion euros in bond were sold by Spain while Italy sold 12 billion euros of bills.

"Spain’s auction was met with strong demand at resulting yields lower than the same maturities late last year, while the Italian auction also saw yields on one-year maturities falling to their lowest levels since June 2011. Obviously investors welcomed these developments,” said Cameron Peacock at IG Markets.

Also, the European Central Bank (ECB) had kept interest rates unmoving in the early part of 2012.

Most sectors ended positively but miners, industrials, and energy had it higher. The retail sector also kept up as it added 0.1 percent.

BHP Billiton shares went up by 0.6 percent while Fortescue Metals Group raised it shares at 1.9 percent.

“Commodity prices overall remain robust...however, mining equities face sentiment headwinds. The market continues to price in further downside, which also creates an opportunity as equity prices aren’t challenging.” This is according to mining-sector strategists at Japanese bank Nomura Securities.

Energy firms, on the other hand, also performed well. A rise of 1.5 percent in the shares of Woodside Petroleum was seen while a 17.7 percent increase in shares was experienced by Linc Energy.

JP Morgan, US banking giant, released its earnings report Friday night. A profit downgrade was experienced by QBE, an insurer, which dragged the Australian market lower. Its shares went down by 3.1 percent at $11.

"With a company like QBE, it could take them nine months before they crawl back up again," said Ord Minnett Equities Consultant, Ian Merrick.

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