Reuters logo
Australia shares fall on high-yielders, caution over Fed outcome
June 18, 2013 / 1:41 AM / 5 years ago

Australia shares fall on high-yielders, caution over Fed outcome

(Adds details, comments, stocks on the move)

SYDNEY, June 18 (Reuters) - Australian shares fell 0.5 percent on Tuesday, dragged down by high-yielding stocks as investors awaited the outcome of the U.S. Federal Reserve’s monetary meeting and clues to when it might start tapering its stimulus programme.

Commonwealth Bank of Australia fell 0.5 percent while National Australia Bank lost 0.8 percent even though Australia’s top four banks currently offer dividend yields of between 5 percent and 6 percent.

Flagship telecommunications provider Telstra Ltd, with dividend yields of 6 percent, slipped 0.2 percent.

“These {high yielding) stocks are a little lower this morning as investors see less compelling value after two days of solid rises,” said Ric Spooner, chief market analyst at CMC Markets.

The S&P/ASX 200 index lost 22.2 points to trade at 4,803.7 by 0126 GMT. The benchmark rose 0.7 percent on Monday.

The local index has suffered a sharp selloff in sympathy with a rout in global markets in recent sessions, driven by uncertainty over the Fed’s stimulus, volatility in Japanese equities and slowing growth in China, Australia’s major export market.

“The Federal Reserve has really been driving the top down investment themes globally with quantitative easing and record low U.S. rates,” said Peter Esho, investment adviser at Wilson HTM.

“It has implications really into all other asset classes.”

Analysts have noted if the U.S. Fed Reserve tightens monetary policy too early, the U.S. economy could slip into recession, dragging global markets with it.

The Fed meets over Tuesday and Wednesday amid intense speculation over its massive bond-buying campaign, but most economists do not expect it to scale back purchases from the current $85 billion a month.

Global miners traded lower after copper dipped on Monday as the dollar firmed and inventories of the metal rose. BHP Billiton Ltd and Rio Tinto Ltd fell 0.4 percent and 0.6 percent respectively.

New Zealand’s benchmark NZX 50 index rose 0.7 percent or 29.8 points to 4,477.5.


* Elders Ltd tumbled 11.1 percent to A$0.08 after the company said it expects to enter into a binding contract for the sale of some of its operating businesses with proceeds used to repay debt.

(0124 GMT)

* Dart Energy Ltd rocketed 15.8 percent to A$0.09, a 2-1/2 month high. The small-cap miner has a tenement portfolio to the south of Caudrilla in the Bowland shale gas area. Centrica PLC announced it had become a 25 per cent investment partner in the Cuadrilla resources Ltd-operated Bowland.

(0125 GMT)

* Carbon Energy Ltd lost 2.9 percent to A$0.03 after the company appointed Morne Engelbrecht its chief executive officer and managing director.

(0126 GMT)

* UGL Ltd jumped 1.7 percent to A$6.70 after the company announced it had secured about $120 million in new contract wins across its global property services business.

0126 GMT Reporting by Thuy Ong; Editing by Eric Meijer

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below