The Australian share market has closed in its worst week in almost three months as a sell-off in commodities sent many resources stocks lower. The ASX/200 entered its worst performance today since the middle of August. The Australian dollar also fell below parity overnight as worries over overseas debt strengthened the US dollar.
The S&P/ASX 200 Index closed 36 points lower to finish at 4,693 and was down 108 points for the week. On the futures market, the SPI200 down 35 points.
Looking to the US and on Wall Street, the Dow Jones Industrial Index is down 161 points over the four trading days this week. The S&P500 Index is down 12 points, the NASDAQ down 23 points and the 100 index down 14 points.
National Australia Bank Ltd (ASX:NAB) has raised its variable mortgage rate by 43 basis points, joining its rivals by moving rates higher than the central bank. NAB however, has sought to curb political backlash and has followed ANZ footsteps by promising to abolish mortgage exit fees which are sometimes as high as $900. Shares in NAB went ex-dividend today and closed 3.54 per cent lower to $24.53.
Westpac Banking Corporation Ltd (ASX:WBC) has rounded up the Big Four and followed right after NAB, by raising its mortgage rate by 35 basis points. Compared to the other major banks, Westpac has the highest mortgage rate at 7.86 per cent, followed by Commonwealth Bank’s 7.81 per cent. ANZ’s rate is 7.80 per cent and NAB is now at 7.67 per cent. Last week, the Reserve Bank raised its official cash rate by 25 basis points but the banks have outpaced the central bank in an effort to offset higher funding costs. Shares in Westpac closed 0.05 per cent higher to $21.94.
Myer Holdings Ltd (ASX:MYR) has posted a 1.5 per cent decline in first quarter sales, which fell to $706 million, compared to the same period last year. The company says weaker TV and entertainment sales coupled with fragile consumer sentiment contributed to the decline in sales.
Grain conglomerate AWB Ltd (ASX:AWB) is bracing itself as its shareholders prepare to vote on whether or not the company is going to become foreign-owned. Canadian company Agrium has placed a takeover bid for AWB and its shareholders are due to meet on Tuesday to decide the outcome.
Australia’s printer and magazine distributor PMP Ltd (ASX:PMP) says it expects double-digits earnings growth for 2010-11 financial year as a result of winning new contracts.
ANZ Banking Group Ltd (ASX:ANZ) chief executive Mike Smith is back in Seoul as negotiations continue over whether or not his bank will buy a 57 per cent stake in Korea Exchange Bank.
In the best and worst market performers: The best performing sector was Utilities which closed 5 points higher to 4,574. The worst performing sector was Industrials with the index falling 40 points to 3,726. The best performing stock in the S&P/ ASX200 was Cudeco as shares were 9.84 per cent higher to $3.35. Shares in Primary Healthcare and OneSteel also closed higher. The worst performing stock was Bow Energy, with shares dropping 9.62 per cent to $1.17. Shares in Linc Energy and Perseus Mining also closed in the red.
In commodities, gold is trading at $US1,389 an ounce which is down $3.60 on the week. Light crude is down $1.28 to $86.53.
The Australian Dollar is buying 99.33 US cents which down 2 cents on the week.
