Reuters: Hot Stocks: Australian shares pare losses after rate cut, NZ hits record closing high

Reuters: Hot Stocks Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Australian shares pare losses after rate cut, NZ hits record closing high May 7th 2013, 06:31 Tue May 7, 2013 2:31am EDT (Adds details, comments) SYDNEY May 7 (Reuters) - Australian shares ended 0.2 percent lower on Tuesday after the central bank decided to cut rates, spurring a modest recovery in financials from the day's lows, while New Zealand's benchmark index hit a record closing high. The Reserve Bank of Australia cut its main cash rate a quarter point to a record low of 2.75 percent on Tuesday and signalled there was room to ease further to support the economy, given low inflation and an historically high currency. "I think it was appropriate for the Reserve to provide a bit more confidence that when the mining investment boom starts to wane the rest of the economy will fill the gap," said Shane Oliver, chief economist at AMP Capital Investors. "I can't say I'm particularly surprised." Top lender the Commonwealth Bank of Australia and Westpac Banking Corp lost 1.9 percent and 1.8 percent, respectively, after posting strong gains on the back of dividend- and earnings-driven rallies to all-time highs last week. National Australia Bank dropped 1.6 percent. Australia's largest bank by asset lowered its variable mortgage rate by 25 basis points on Tuesday, passing on the full quarter-point cut in the official cash rate. "We saw banks bounce back," said Michael McCarthy, chief market strategist at CMC Markets. "However, we're now seeing a moderation of that. The market's given up half of those immediate gains." The average dividend yield for the big four banks is some 5.1 percent, compared to between 3 to 4 percent yields for 12-month maturity depositor accounts. An interest rate cut to record lows will make stocks with high yields attractive to investors. However, fund managers and investors were still digesting the implications of the rate cut and the central bank's statement while traders continue to push the market around, McCarthy noted. The S&P/ASX 200 index fell 12.5 points to finish at 5,143.7 after hitting a low of 5,118.9 during the session. The index rose 0.5 percent on Monday. A total of 662.8 million shares traded hands in another subdued session. Consumer retail staples Woolworths Ltd and Wesfarmers, which have relatively high yields of 3.6 percent and 4 percent, respectively, fell 2.1 percent and 1.4 percent. Telstra Ltd, another high yielding stock, fell 1 percent to A$5.01 after the top telecommunications provider secured spectrum licences in the 700 mhz and 2.5 ghz bands. Global miners were firmer and helped limit the losses on the benchmark index after copper rose for a third straight session to its highest in three weeks on Tuesday. BHP Billiton Ltd climbed 2.4 percent while rival Rio Tinto Ltd rallied 2.1 percent. Rio Tinto is set to press on with plans to boost production at its Australian mines by a quarter in 2015, shrugging off pressure to slow spending and conserve cash as the commodity boom cools. Linc Energy tumbled 17.8 percent after it decided to delay a well in Alaska. On Wall Street, the S&P500 closed at another record high on Monday, pushing further above 1,600 as financial shares led the way after Bank of America's settlement with MBIA. New Zealand's benchmark NZX 50 index finished the session 0.6 percent or 25.5 points higher at a record closing high of 4,621.7. (Reporting by Thuy Ong; Additional reporting by Michael Sin; Editing by Kim Coghill) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions