ENM: Australia shares end down 1 pc, Telstra drops
SYDNEY: SYDNEY: Australian stocks fell 1 percent on Tuesday, dragged down by top phone company Telstra Corp Ltd, while Macarthur Coal Ltd tumbled
on a profit downgrade. While Australia's central bank signalled on Tuesday that its rate cutting campaign could slow, investors were focused on the Federal Reserve's rate setting meeting on Tuesday.
Analysts widely expect the Fed to cut interest rates to close to zero. "All eyes are on offshore developments for the short term," said Paul Xiradis, chief executive of fund manager Ausbil Dexia.
"Global markets, and for that matter US markets, have been handling bad news relatively well. I think a cut by the Fed will help sentiment and is a step in the right direction." Australia's benchmark S&P/ASX 200 index fell 35.2 points to 3,556.2, based on the latest available data, after rising 2.3 percent on Monday.
New Zealand's benchmark NZX 50 index rose 0.7 percent to 2,695.1. Telstra lost 3 percent to a record closing low of A$3.54, adding to Monday's 12 percent drop, after the government rejected its A$10 billion ($6.7 billion) plan to build a national broadband network, which could dent its market share beyond 2010.
Reacting to the government decision, broker Goldman Sachs JBWere lowered its rating on Telstra to hold from buy, Macquarie cuts its rating to neutral from outperform, and Citigroup slashed its price target by 19 percent to A$3.40 a share.
"It seems quite enticing to me at this price. It's not going to affect their short-term earnings at all," said David Spry, research manager at broker FW Holst. Macarthur Coal tumbled 22.4 percent to A$2.70 after cutting its earnings forecast due to slowing coal demand.
Rival Felix Resources Ltd, which is engaged in takeover talks, dropped 3 percent to A$3.54. "We're still seeing downgrades and production cuts. We're gearing up for a pretty tough 2009. There's just no positive catalyst to drive the market," Spry added. Top miner BHP Billiton Ltd fell 0.8 percent to A$30.64, while Rio Tinto Ltd fell 1.8 percent to A$39.20.
Property investor and construction group Lend Lease Corp fell 6.2 percent to A$6.92. It promoted its finance director, Steve McCann, to chief executive to replace Greg Clarke, who is retiring in 2009. For more, click on.
Fellow property investor Goodman Group recovered from a low to end down 13.3 percent at A$0.52. The company, which raised A$833 million through share sale in October, said it was not aware of any reason for the share fall. ($1=1.494 Australian Dollar) While Australia's central bank signalled on Tuesday that its rate cutting campaign could slow, investors were focused on the Federal Reserve's rate setting meeting on Tuesday.
Analysts widely expect the Fed to cut interest rates to close to zero. "All eyes are on offshore developments for the short term," said Paul Xiradis, chief executive of fund manager Ausbil Dexia.
"Global markets, and for that matter US markets, have been handling bad news relatively well. I think a cut by the Fed will help sentiment and is a step in the right direction." Australia's benchmark S&P/ASX 200 index fell 35.2 points to 3,556.2, based on the latest available data, after rising 2.3 percent on Monday.
New Zealand's benchmark NZX 50 index rose 0.7 percent to 2,695.1. Telstra lost 3 percent to a record closing low of A$3.54, adding to Monday's 12 percent drop, after the government rejected its A$10 billion ($6.7 billion) plan to build a national broadband network, which could dent its market share beyond 2010.
Reacting to the government decision, broker Goldman Sachs JBWere lowered its rating on Telstra to hold from buy, Macquarie cuts its rating to neutral from outperform, and Citigroup slashed its price target by 19 percent to A$3.40 a share.
"It seems quite enticing to me at this price. It's not going to affect their short-term earnings at all," said David Spry, research manager at broker FW Holst. Macarthur Coal tumbled 22.4 percent to A$2.70 after cutting its earnings forecast due to slowing coal demand.
Rival Felix Resources Ltd, which is engaged in takeover talks, dropped 3 percent to A$3.54. "We're still seeing downgrades and production cuts. We're gearing up for a pretty tough 2009. There's just no positive catalyst to drive the market," Spry added. Top miner BHP Billiton Ltd fell 0.8 percent to A$30.64, while Rio Tinto Ltd fell 1.8 percent to A$39.20.
Property investor and construction group Lend Lease Corp fell 6.2 percent to A$6.92. It promoted its finance director, Steve McCann, to chief executive to replace Greg Clarke, who is retiring in 2009. For more, click on.
Fellow property investor Goodman Group recovered from a low to end down 13.3 percent at A$0.52. The company, which raised A$833 million through share sale in October, said it was not aware of any reason for the share fall. ($1=1.494 Australian Dollar)
