Economists tipping 25 Points Rate Cut
Sydney, Mar 3, 2009 AEST (ABN Newswire) - Overnight US stocks closed at their lowest levels in 12 years as the massive losses by AIG and HSBC raised new fears over the financial sector. The US market had suffered one of the worst days last night, down 300 points which was equivalent of 4% or more in terms of percentage. The fall was substantial as more bad news had emerged, says Research director Thomas Su of Money Cat.
The Australian market was treading water on Monday in the midst of a combination of negative news from overseas and in the domestic scene. The benchmark S&P/ASX200 index fell 94.4 points, or 2.82 per cent, at 3250.1, while the broader All Ordinaries plunged 93.1 points, or 2.82 per cent, to 3203.8.
"This is one very dark tunnel and investors aren't sure whether they're seeing a light at the end or simple a mirage," said David Taylor, market analyst at CMC Markets. "On our market today, we saw money once again flowing into the defensive stocks like the gold miners and consumer staples, and away from the big miners and financials," Taylor said on Monday.
Key Economic Facts and Figures
Australia's new homes sales, including multi-unit dwellings, has gained by 8% in January, reversing a 1.1% fall in December, according to the Housing Industry Association. The figures showed that buyers started to respond to the government's stimulus plan and interest rate cuts.
Today the Reserve Bank of Australia board is to announce its decision on the cash rate in the afternoon. Most economists are tipping a 0.25 per cent cut. The Australian Bureau of Statistics (ABS) will release December quarter balance of payments figures, and retail trade figures for January, as well as government finance statistics for the December quarter.
M&A News
Chinalco president Xiong Weiping will discuss with Australia's Foreign Investment Review Board officials today over the A$30.64 billion Rio Tinto (ASX:RIO) deal. Chinalco has expressed that the China's state-owned company is not intending to control Australia's resources or influence commodity pricing.
Important Corporate News
Locomotive engineer Coote Industrial (ASX:CXG) has cancelled its interim dividend and flagged the sale of some business activities. Coote reported a A$2.19 million net profit for the six months to December 31, down from A$7.3 million in the previous corresponding period.
It is reportedly that Pacific Brands Ltd. (ASX:PBG) has appointed investment bank UBS AG to handle the sale of up to 200 small brands as part of a restructure plan.
Australian nickel miner Albidon (ASX:ALB) said it will suspend its Munali nickel mine in Zambia immediately because of low metal prices. But the company also said in statement that limited development activities may recommence so that production levels greater than 900,000 tonnes per year can be readily achieved when nickel prices improve.
Macquarie Group's (ASX:MQG) share yesterday fell to their lowest level in over a decade, due to speculation the group may have to write-down the value of its satellite funds, such as Macquarie Infrastructure Fund and Macquarie Airports.
(Part of the information above is contributed by CMC Markets. For further details, please visit http://www.cmcmarkets.com.au )
Contact
Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.liang@abnnewswire.net
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