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Sunday, March 4, 2012

Australia shares down but off lows on China PMI

Sunday, 04 Mar 2012

Australian shares fell 1% with miners dented by falls in copper and gold prices on signs the US is not planning fresh stimulus measures though the local market was lifted from its lows by positive signs from top customer China.

China's factory sector grew more than expected in February as export orders expanded for the first time in 4 months, supporting hopes the world's second biggest economy can avoid a hard landing.

Mr David Spry research manager at broker FW Holst said that "China is continuing to chug on. It's coming off a bit but it's not something that at this stage we get too concerned about. I think we'll range trade as we have been for a little while. There's nothing really to give us that next kick. To get a uniform swing up is going to take something quite dramatic to happen and I just can't see anything ion the horizon to drive that.

Mr Cameron Peacock analyst at CMC Markets said that "How did the market interpret these comments? Don't expect QE3 anytime soon. The ramifications for the commodity complex were significant, with base metals selling off sharply, oil continuing its pullback from recent highs and gold getting slammed by more than USD 85.

New Zealand's benchmark NZX 50 index rose 0.3% to 3330.9. Among other major movers in Australia, coal miner New Hope Corp dived 4.9% after it scrapped plans to sell itself for more than USD 5 billion.

Woolworths was flat after 3.2% rise in H1 earnings satisfied analyst forecasts and the supermarket leader said it was still on track to achieve full year guidance for 2% to 6% profit growth.

Source - Economic Times

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