Local shares fall on US lead: Afternoon market insights

The Australian market fell after the opening bell following negative leads from the US overnight.

The negative sentiment in world financial markets was driven by weaker than expected US job figures and a poor take-up by investors of Spanish bonds late last week.

The S&P/ASX200 recovered some losses during the day but finished down.

Australian resources, metals/mining, telecommunication services, consumer discretionary, materials, consumer staples, energy, industrials and information technology services all declined, with only the safe-haven of the gold sector rising.

The S&P/ASX200 was down 0.57% to 4295.30. The All Ordinaries Index was down 0.58% to 4376.70.

The day’s winners

Downer EDI (ASX: DOW) was up 4.04% to $3.86 at 1.55pm. It provides engineering and infrastructure management services to public and private transport, energy, infrastructure, communications and resources sectors across Australia, New Zealand and the Asia Pacific region.

Paladin Energy (ASX: PDN) rose 3.86% to $1.75 at 2.30pm. Paladin today confirmed that deliberations for a joint venture in its uranium assets are ongoing.

In a statement to the market Paladin said talks with “nuclear industry parties” have resulted in proposals that have highlighted a broad interest in its future production platform, leaving the company open to all options in monetising assets.

The day’s losers

Energy World Corporation (ASX: EWC) had fallen 7.48% to $0.68 by 2.10pm. EWC is an energy company engaged in the production/sale of power and natural gas in Asia and Australia.

Sims Metal Management (ASX: SGM) was down 3.54% to $14.17 at 2.20pm. Sims Metal is the world’s largest metals and electronics recycler, with more than 250 locations on five continents and 6,200-plus employees. It is listed on the New York Stock Exchange as (SMS: US).

Sector movers

The strongest sector was the All Ordinaries Gold (Sub-Industry) which was up 1.19% to 5903.60.

The weakest sector was the S&P/ASX 200 Health Care (Sector) index which was down 1.85% to 4666.2 at 2.30pm.

Currency

The Australian dollar rose slightly today as demand for the US dollar receded on weak US job figures. One Australian dollar was buying $US1.0315 at 2.45pm.

Asian markets

Japan’s NIKKEI 225 was down 0.10%, or 9.37 points, to 9536.89 at 3.10pm AEST.

Hong Kong’s Hang Seng was down 1.11% or 227.89 points to 20365.10.

Asian financial markets were down slightly today following the negative lead from the US overnight.

The yen weakened in the morning, temporarily buoying Japanese export companies, seeing the first Japanese equity advance for nearly a week.

Then the Bank of Japan policy meeting decided to resist pressure from politicians and did not to ease monetary policy to counter deflation. The yen strengthened immediately to hurt values of Japanese exporters, sending the market lower in Tokyo.

“The BOJ held off on additional easing to show it isn’t willing to be pushed around by politicians,” Junko Nishioka, a Tokyo-based analyst at RBS Securities Japan, who has worked for the central bank, told Bloomberg.

“The BOJ will be under pressure to ease policy at its next board meeting because of its close-to-zero per cent inflation outlook.”

It was Hong Kong’s first trading day after the Easter break.

“People are already more or less defensively positioned and they’re taking advantage of lower valuations,” Pauline Dan, Hong Kong-based chief investment officer at Samsung Investment Trust, which oversees the equivalent of $72.1 billion in assets, told Bloomberg.

“But the basic dynamic hasn’t changed – Asia will do relatively better than other markets.”

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