Wednesday, 6 July 2011

Shares recover from Portuguese downgrade to close higher

By finance reporter Jesse Leary

Posted 1 hour 4 minutes ago

Local shares finished the day slightly ahead, recovering from early falls which were led by the banking sector.

The All Ordinaries closed up 7 points to end up at 4,664, while the ASX 200 also added 7 points to close at 4,605.

The big banks weighed on the market after ratings agency Moody's downgraded Portuguese banks to junk status.

The agency believes there is a growing risk the country will need a second bail-out before it is ready to borrow money from financial markets again.

The major banks were down well over 1 per cent around midday, but have recovered a bit.

National Australia Bank closed down the most, losing 0.6 per cent to $24.99.

ANZ and Westpac did the best, down just 0.2 per cent.

Among the miners, Rio Tinto reversed earlier losses, adding 28 cents to close at $83.60.

BHP Billiton gained 0.5 per cent to $44.45.

Agricultural company Elders says the suspension of live cattle exports to Indonesia could cost the company up to $7.3 million.

However the company, which owns feedlots and abattoirs in Indonesia, says these figures are yet to be tested and verified.

Shares in Elders dropped by 1.3 per cent during the day's trade.

Retailers are doing better after suffering falls across the sector yesterday.

Harvey Norman and Myer added about 2 per cent, while major retail chains Woolworths and Wesfarmers both edged ahead.

Telstra shares finished flat on the day - the telco announced it will merge the sales and customer service sections of its business in preparation for the rollout of the National Broadband Network.

The new section is set to begin operating next month.

Currencies and commodities

The Australian dollar was buying 107.2 US cents, 74 euro cents, 86.7 Japanese yen, and 66.9 British pence around 5:00pm (AEST).

Spot gold was worth $US1,517 an ounce.

West Texas crude was higher at $US96.90 a barrel.

Tapis was also higher at $US120.10 a barrel.


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