The Australian sharemarket limped to a flat close after a dovish speech from Federal Reserve chairman Ben Bernanke and a strong production report from Rio Tinto failed to dissuade investors from taking profits following strong gains in equities and commodities in recent weeks.
The Fed chairman said there was "quite a way" to go before he would be satisfied with the US economy, and he did not see easy monetary policy and quantitative easing fuelling inflation.
Rio Tinto reported a 4 per cent rise in its global iron ore output to 253 million tonnes in 2012, exceeding its guidance of 250 million tonnes.
However, BHP Billiton, Rio, Fortescue Metals and Atlas Iron shares declined between 0.1 per cent and 3.6 per cent as iron ore prices continued to falter after rising more than 80 per cent since September.
Profit-taking was also evident in Westpac, Telstra and Coca-Cola Amatil, which fell between 0.5 per cent and 1.6 per cent following strong share price gains last year.
The benchmark S&P/ASX 200 closed down 0.1 per cent at 4716.6, reversing a 0.3 per cent intraday rise.
"I don't think Mr Bernanke can say much more to boost global markets any more," said Nader Naeimi, senior investment strategist and portfolio manager for AMP Capital's Multi Asset Group. "If anything, central bankers in Europe and the US are sounding a bit less downbeat recently. But I certainly think US quantitative easing is here to stay next year."
Traders expect consolidation ahead of US earnings reports in coming weeks, and the start of the Australian earnings season next month.
"I still have a view that the market will track sideways for a few weeks," said RBS Morgans investment adviser Christopher Macdonald. "That will bring us through to Chinese New Year, after which we will look at Australian earnings reports, Italian elections and US debt ceiling talks, and they are going to increase volatility in the market, which could give us buying opportunities ahead of a test of 5000, possibly with some help from a domestic interest rate cut and further economic stimulus in China."
Billabong jumped 16 per cent after receiving a cash takeover bid from a consortium involving US clothing maker VF Corporation, setting the stage for a bidding contest for the surfwear company.
The proposed $1.10-a-share cash offer by VF and Altamont Capital Partners matched an earlier joint bid by private equity firm Sycamore Partners and former director Paul Naude.
On the ASX 24, the March share price index futures contract was three points lower at 4692, with 20,823 contracts traded.
The spot price of Sydney gold closed at $US1671.63, up $US4.83 from Monday's close of $US1666.80. National turnover was 1.506 billion shares worth $3.975 billion, with 464 stocks up, 505 down and 345 unchanged.
Source:
http://www.theaustralian.com.au/business/markets/stocks-flat-as-profit-takers-strike/story-e6frg916-1226554658874
