SYDNEY: Australian shares recovered early losses to edge higher on Wednesday, though big miners slipped on weaker demand for iron ore, and banks were mixed in light turnover.
Encouragingly, Australia's private new capital expenditure rose 12.3 percent in the third quarter, beating forecasts, though other data showed annual growth in domestic housing credit has slowed to below 6 percent this year, a marked change from the double-digit pace of the previous decade.
Investors are hesitant as they watch to see how Europe will resolve its debt crisis. European officials agreed to strengthen a bailout fund and seek more aid from the International Monetary Fund as Italy's borrowing costs hit fresh highs.
"I liken the situation in Europe to a family feud where you've got 17 different family members all arguing about an inheritance. It's going to be very, very difficult to resolve,"
said Winston Sammut, investment director, Maxim Asset Management.
"It's a very difficult environment to invest in and I'd prefer to wait and see what transpires over the next couple of months before putting any more money into the market," he said.
The benchmark S&P/ASX 200 index was up 7.1 points at 4,109.2 at 0057 GMT. It rose 1.1 percent on Tuesday after dropping below 4,000 last week.
"You can get it very wrong if you think you can pick the moves in this volatile market. I think it's best to conserve capital at this time as best you can," said Sammut.
He recommended cash or listed hybrids that offer double-digit returns for the next few months, citing Multiplex Sites Trust and Australian Education Trust.
New Zealand's benchmark NZX 50 index firmed 0.3 percent to 3,239.6.
STOCKS ON THE MOVE:
BHP Billiton fell 0.5 percent to A$34.79 while Rio Tinto shed 0.7 percent to A$63.03 after spot iron ore prices fell the most in a month, reflecting slack demand for the steelmaking ingredient from top consumer China. See.
Metcash slipped 0.5 percent to A$3.95 after it forecast low- to mid-single digit growth in underlying earnings per share for the full year after sales rose 1.7 percent in the first half, including new stores.
"Metcash, like Woolworths, is now deeply entrenched in what seems to be a long term battle for retailer dollars," said City Index analyst Peter Esho.
"Metcash will need to work very hard in making sure its network of independent retailers is competitive. This will require investment," he said.
Woolworths rose 0.5 percent while Wesfarmers , owner of Coles supermarkets as well as coal and other assets, was unchanged.
Extract Resources gained 1.4 percent to A$8.06 after it won a long-awaited licence to develop its Husab uranium mine in Namibia, the Australia-based company said on Wednesday.
Comments
Comments are closed for this article.