Shares lower as dollar falls: Afternoon market insights
Wednesday, May 23, 2012/
The Australian sharemarket fell lower today as investor sentiment on Europe weakened.
The ASX200 gave up 1.31% to 4067, while the broader All Ordinaries index lost 1.31% to 4055.1.
Among widely held stocks, all apart from News Corporation and AMP Limited recorded falls. Myer shares plummeted 7.83% to $2.00 after the company revealed third-quarter sales fell 2.1%.
The Australian dollar hit a six-month low to US99.20 cents as speculators flocked to safer currencies amid fears Greece will leave the Euro.
Elsewhere in the economy, the outlook for economic growth is on the rise but is still below average, according to the latest Westpac-Melbourne Institute Leading Index.
The index measures the likely pace of economic activity three to nine months in the future.
The index was 2.2% in March, well below the long-term trend of 2.9%.
Westpac chief economist Bill Evans said in a statement the growth rate has been below trend for several months.
“This is the seventh consecutive month that the growth rate in the Leading Index has been below trend,” Evans said.
“The growth rate has picked up somewhat from the absolute low in November last year, but the level in March does not encourage too much optimism that growth is likely to exceed trend any time soon.”
“That profile is consistent with Westpac’s forecast for growth in the Australian economy in 2012 of 3%, which would mean that Australia had grown below trend for five consecutive years.”