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Category: Currency / Stockmarket / Markets

ASX: Australian shares resume falls, Japanese stocks thumped

Friday, 12 Feb 2016 07:27:04 | Michael Janda

Australian shares have resumed steep falls after a brief rebound yesterday. (AAP: Dan Himbrechts)

The Australian share market has fallen again on weak overseas leads, while Japanese stocks have been thumped after central bank comments.

Key points

  • ASX 200 down 1.1 per cent at 4,769
  • Tokyo's Nikkei slumps 5.3 per cent
  • Australian dollar at 71.1 US cents

Australia's benchmark ASX 200 index of larger stocks was down 1.1 per cent to 4,769 by 2:04pm (AEDT), while the broader All Ordinaries index was 51 points off at 4,820.

However, the local market's slide was dwarfed by a 5.3 per cent slump for Japanese stocks on their return from a public holiday.

Tokyo's Nikkei dropped 839 points to 14,875 before heading into the market's lunch break.

The catalyst for the worst of the decline appears to have been comments from Bank of Japan governor Haruhiko Kuroda, who reiterated a commitment to "take whatever steps necessary" to hit the bank's 2 per cent inflation target.

Mr Kuroda said this could include additional monetary easing, beyond the negative interest rates that the BoJ has imposed on some bank deposits.

However, Mr Kuroda shirked responsibility for the recent market turmoil, which some analysts are blaming on the BoJ's surprise move to negative interest rates, saying it was simply due to "excessive risk aversion" amongst investors.

However, the BoJ's efforts to stimulate the Japanese economy and lower the currency have had the opposite effect, with the yen rising against most major currencies.

Banks bear the brunt of local sell-down

Banks were again leading the sell-off, after financial institutions in Europe and the US were hammered once more overnight.

ANZ's 2.25 per cent slide was leading the decline, with Westpac down 2.2 per cent, NAB 1.7 per cent and the Commonwealth Bank 0.6 per cent.

Regional banks Bendigo and Adelaide and Bank of Queensland continued their horror weeks falling around 4.1 and 2.7 per cent respectively.

Investment bank Macquarie fell 2.7 per cent to $58.89.

The oil and gas sector was holding up relatively well, considering another fall in the price of oil overnight.

West Texas crude was down to $US26.14 a barrel, while Brent was worth $US31.34.

Woodside Petroleum was down just 0.5 per cent to $26.55.

Other resources stocks were mixed: BHP Billiton found a little support to rise 0.5 per cent to $15.31, while Rio Tinto was up just 1 cent $41.00 after posting a $1.2 billion full-year loss yesterday evening after the local market closed.

Gold miner Newcrest, which has been one of this year's standout performers, was up another 1.5 per cent to $16.57 after gold prices hit a one-year high overnight.

Spot gold was worth $US1,237 an ounce this morning.

The Australian dollar was also a bit higher against most major currencies at 71.1 US cents, 62.8 euro cents, 79.9 Japanese yen and 49.1 British pence.

AustraliaPlus


 

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