Reuters: Hot Stocks: Australia share-run stalls, JB Hi-Fi drops

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Australia share-run stalls, JB Hi-Fi drops Nov 28th 2012, 06:48 MELBOURNE | Wed Nov 28, 2012 1:48am EST MELBOURNE Nov 28 (Reuters) - Australian shares slipped 0.2 percent on Wednesday, weighed by top miners as commodity prices retreated and investors fretted over how the U.S. "fiscal cliff" budget impasse will be resolved. BHP Billiton fell 0.6 percent and Rio Tinto shed 1.9 percent, giving up gains clocked in the previous session. "The run higher in risk assets has for the moment stalled, much like the 'fiscal cliff' discussions themselves it would seem," said Tim Waterer, trader at CMC Markets, adding that traders were "making a slight lean towards the side of caution." "Much of the buying momentum enjoyed in the last week or so seems to have dissipated ... However at the first sign of forward progression from U.S. politicians I would expect the market to again be pepped up on expectations that a deal will eventually get done," he said. The benchmark S&P/ASX 200 index fell 9.5 points to 4,447.3, according to the latest data. It rose 0.7 percent on Tuesday to a two-week closing high of 4,456.8. New Zealand's benchmark NZX 50 index rose 2.5 points to 4,012.2. Banks recovered early losses to mostly end higher, led by a gain of 0.6 percent in Westpac Banking Corp. "You are seeing signs coming through of investors starting to look for stocks that have good structural businesses with a high degree of earnings certainty and strong balance sheets and pay out good dividends," said David Liu, head of research at fund manager ATI Asset Management. Interest was focused in top 20 stocks, including the big four banks, and Telstra Corp, he said. Big losers on Wednesday included mining services firm NRW Holdings, which slumped 18 percent to A$1.48 after it said its annual net profit margins may fall to 5 to 6 percent, down from 7.1 percent in fiscal 2012, due to weaker prices and as demand softens. "As we experience subdued global demand and commodity price weakness, clients are focused on cost reductions and these pressures are being passed on to contractors," Chief Executive Julian Pemberton said in a trading update. Retailer JB Hi-Fi fell 5.5 percent to A$10.10 after it said it would expand into whitegoods, cooking and small appliances as earnings from its DVDs, CDs and games decline due to online competition. "The market probably expected them to focus a lot more on the online strategy. In the shorter term, its probably got negative implications for the business and it could lead to margin compression," Liu said. "Initially they are going to have to spend quite a lot on advertising." (Reporting by Miranda Maxwell; Editing by Richard Pullin) Link this Share this Digg this Email Reprints

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