Shares dip as China data spooks investors

Updated March 12, 2012 17:10:46

The Australian share market has beat a retreat in thin trade amid further signs China's economy is slowing.

With a lack of local data releases today and public holidays in Victoria, South Australia, Tasmania and the ACT, investors appeared to focus instead on news from overseas.

But positive employment data from the United States on the weekend and news that Greece had secured its second international bailout were not enough to boost sentiment after official figures showed China had posted its first trade deficit in 22 years in February.

China is normally a net exporter of goods, but last month imports surged 39.6 per cent year-on-year while exports rose 18.4 per cent.

This added to concerns after Chinese premier Wen Jiabao last week warned that China's economy would grow at its slowest rate in eight years this year.

The benchmark ASX 200 index dropped 0.4 per cent to 4,197 and the All Ordinaries index finished 0.3 per cent lower at 4,288.

The major miners struggled; Rio Tinto dropped 0.6 per cent to $63.74 and BHP Billiton finished flat at $34.71.

Fortescue Metals surged 3.9 per cent to $5.86.

"We are getting more confirmation of a slowdown in China," said CMC Markets strategist Ric Spooner.

"When one puts that in perspective for the Australian economy and resources, it does not look too strong in the short-term."

The big banks all dropped around 0.9 per cent except Commonwealth Bank, which fared slightly better for a loss of 0.5 per cent to $47.84.

And the retail sector continued on its downward trend; clothes maker Pacific Brands gave up 4.6 per cent to 62 cents, electronics discounters Harvey Norman and JB Hi-Fi both lost around 1 per cent and Myer eased 0.4 per cent.

David Jones was one of the few in the sector to see a positive result; its shares gained 1.5 per cent to $2.73.

Telstra shares also finished lower, losing 0.9 per cent to $3.22.

Phillips River Mining shed 38 per cent to 16 cents after Silver Lake Resources said it had called a stop to a proposed merger between the two companies.

The Australian dollar also suffered amid the gloom on China and at 4:45pm (AEDT) was buying 105.2 US cents, 86.5 Japanese yen, 67.2 British pence, 80.4 euro cents and $NZ1.29.

Tapis crude oil was higher at $US134.73 a barrel and West Texas crude oil was slightly lower at $US106.59 a barrel.

The spot gold price has dropped to $US1,704.85 an ounce.

ABC/Reuters

Topics: business-economics-and-finance, markets, currency, stockmarket, australia

First posted March 12, 2012 16:54:31

Source: http://www.abc.net.au/news/2012-03-12/australian-share-market-close/3884396

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