Just Group Limited

The Australian stock market closed almost 2% lower yesterday amid concerns on the short selling ban, as well as over the effectiveness of the US government's proposed bailout of the financial sector. Analysts said investors are waiting for some real clarity from the government.

Yesterday the Australian share market was dragged down by a 6% fall in Rio Tinto and broad-based weakness across the resources sector on falling commodity prices and a weak US lead. The benchmark S&P/ASX200 was down 56 points, or 1.1%, to 5060, while the broader All Ordinaries had lost 64.5 points, or 1.2%, to 5130.5.

Yesterday, the Australian share market closed more than two per cent lower, dragged down by the resource and financial sectors and a weak lead from Wall Street. Banks and financials reacted poorly to news regarding troubled US mortgage lenders Fannie Mae and Freddie Mac.

The Australian share market opened higher today led by the financial sector and despite disappointing US economic growth data. US equities slumped on readings on jobs and manufacturing which indicated that businesses and workers still face a tough economy.

Australian shares closed firmly in the black yesterday for the second consecutive day, driven by a positive US lead and higher prices overnight for copper, nickel and oil. DJ Carmichael research assistant Peter Kopetz said investors remained cautious and would continue to looking for more signs of positivity from company earning reports during the latter part of the profit reporting season in August. More big swings in the US are expected as their profit reporting season continues.

The Australian share market was boosted by banks yesterday after investor confidence returned following a rally overnight on Wall Street. The benchmark S&P/ASX200 index rose 89.2 points, or 1.84%, to 4936.7, while the broader All Ordinaries climbed 85.4 points, or 1.73%, to 5008.7.

Australian financial stocks is likely to continue gains on improved sentiment towards the sector in overseas markets, though weaker oil and metals prices may weigh on resource stocks. Analysts have cautioned that despite recent market gains, overall sentiment was still fragile and a further spike in energy prices or more bad news out of credit markets could trigger a fresh wave of selling.