| Traders Bracing For Slump Drive Up Platinum, Wheat, Coffee And Cocoa
Platinum and spring wheat hit record highs Thursday and arabica coffee and cocoa set new trading peaks as well, as investors in commodities pursued markets deemed less vulnerable to the slowing U.S. economy. Copper, an economically sensitive base metal, overcame jitters over U.S. growth by reacting to Wednesday's cut in interest rates. Traders said copper was also inspired by Thursday's rebound in Wall Street stocks and lingering production issues in China. But broad commodity futures indexes closed mixed, with the Reuters-Jefferies CRB and Dow Jones-AIG up and the S&P GSCI down. U.S. crude oil also fell, closing 58 cents lower at $91.75 a barrel on fears of slowing growth in the world's largest economy and the leading energy-consuming nation. Investors in energy were also sidelined ahead of an OPEC meeting on production quotas set for Friday.
Glimmer of hope amid the gloom
Resources stocks were hit hard after gold and base metals prices dipped overnight, while oil dropped to its lowest level in a month. Locally, a late session rally pared back losses on the benchmark indices from more than three per cent in morning trade. At the 4.15pm close (Sydney time), the S&P/ASX200 index had fallen 48.8 points, or 0.84 per cent, to 5747.3 while the broader All Ordinaries shed 57.6 points, or 0.98 per cent, to 5799.4. On the Sydney Futures Exchange at 4.25pm, the March share price index contract had dropped 29 points or 0.5 per cent to 5763 on a volume of 36,599 contracts. But CommSec equities Analyst Juliana Roadley said the Australian sharemarket remained a good vehicle for retail investors, adding that the current environment would also present some bargains.
Big miners drag stocks down
On the Sydney Futures Exchange, the December share price index contract was down 72 points to 6528, on a volume of 19,549 contracts. CMC Markets dealer Matt Wacher said lower base metal prices overnight are weighing on the local bourse. "Most of the sectors seem to be pretty flat. Energy and materials sectors are off," Mr Wacher said. "I guess the materials and energy sectors are off on the back of the commodity prices overnight. Oil prices and all the base metals took a bit of a beating and similarly with the gold price which was off quite substantially." Mr Wacher said positive retail sales data in the United States helped to buoy stocks on Wall Street."The US retail sales result was pretty strong so that's probably given a bit of impetus to the market as a whole over there. "It started much lower on the day and ended up around 40 points on the close...
Soft miners, banks keep lid on stocks
THE Australian stock market was little changed at noon amid subdued trading, although the big miners were weaker after base metals prices came under pressure again. The benchmark S&P/ASX200 index was 0.4 points higher at 6334.7, while the All Ordinaries had gained 1.1 points to 6396.2. On the Sydney Futures Exchange, the December share price index contract was seven points lower at 6364 on a volume of 5,580 contracts. Austock Securities senior client adviser Michael Heffernan said the market lacked firm direction. "It's been a bit choppy, which is not surprising given the fact that is no lead from our normal leader, which is the US," Mr Heffernan said. "Commodity prices were a bit on the soft side.' "It is interesting that the major drivers of our market, the banks and financial sectors, are in negative territory." Following a round of profit-taking in the past couple of sessions, it could be time for investors to buy again, Mr Heffernan said.
Stocks Advance, Led by Techs
Stocks closed higher Wednesday after reversing an earlier drop. Technology issues were among the session's best performers, aided by a strong earnings report from Hewlett-Packard (HPQ). Financial stocks rose later in the day, as minutes from Federal Reserve January policy meetings apparently supported hopes for further interest rate cuts. Stocks tied to precious metals and oil got a lift from gains in commodities futures, as crude oil topped the $100 mark once again to close at a new record. Investors also digested reports showing worsening inflation risks and only slight improvement in the housing market. On Wednesday, the Dow Jones industrial average finished higher by 90.04 points, or 0.73%, at 12,427.26. The broader S&P 500 index added 11.25 points, or 0.83%, to end at 1,360.03.
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