$a Puts On A Spurt As Stocks Tiptoe To A Close
The Age
Saturday June 23, 2007
THERE was no winding down for the weekend as far as the Australian dollar was concerned.
While the sharemarket was flat, with the S&P/ASX 200 Index down a negligible 4.4 points at 6382.6, the dollar had a tilt at the US85? mark (see daily graph). It reached US84.91? just before 5pm, a level not seen since February 1989 when the Aussie was pushing towards US90? (see historical graph). Singapore-based Westpac senior currency strategist Sean Callow said the dollar's surge came as London traders were coming online and coincided with similarly sharp rises in the euro, the New Zealand dollar and the British pound. Meanwhile, the US dollar hit a five-year record against the yen, rising above Y124. And the Aussie reached a 16-year high of Y105.37. According to ANZ research, the Bank of Japan estimates that between Y5 trillion and Y10 trillion ($A47-$A94 billion) is caught up in the so-called carry trade, where people sell yen to invest in higher-yielding currencies. Combined with a weaker US dollar and strong commodity prices, the practice is pushing the Australian dollar ever higher. On the sharemarket front, Deloitte partner Grant Hyde said the Deloitte Victorian Index rose 1.5 per cent this week, making two consecutive weeks of gains. But it was no match for the S&P/ASX 200 Index, which gained 1.6 per cent, and it fell short of Hong Kong's Hang Seng, which climbed 4.3 per cent. One of the biggest movers was biopharmaceutical CSL, which rose 3.7 per cent during the week, getting back over $90 a share after a period in the doldrums. Yesterday it gained $1.40, or 1.6 per cent, to $91.49. Rio Tinto, which beat CSL and Macquarie Bank to the $100-a-share mark this week, lost a further 53? to $98.97 yesterday. But in a research paper, Deutsche Bank analyst John Mackinnon and colleagues said the "robust" iron ore market would push the miner even higher. They have set a price target of $123 a share within 12 months. Also on the market, gold and nickel explorer Jupiter Mines rose 36.6 per cent yesterday, topping a combined 16.5 per cent gain on Wednesday and Thursday. The increase brought the junior miner, which suffered when directors Jeremy Snaith and David Evans were imprisoned in Abu Dhabi, back to 28? a share. Jupiter Mines had reached a 12-month closing high of 41.5? a share before an incident aboard an Etihad flight that led to the two men being tried for sexual harassment and assault. Among the S&P/ASX 200 members, Caltex Australia experienced the biggest fall in percentage terms yesterday after releasing earnings guidance that disappointed the market. Caltex fell $2.90, or 10.4 per cent, to $25.10 even though the oil price remained above $US68 a barrel. In administrative news, Standard & Poor's will remove Rinker Group from the S&P/ASX indices at close of business on July 2. Rinker, which will become part of Mexican cement company Cemex, will be replaced by Mount Gibson Iron and by CSL in the S&P/ASX 20 index. Moody's has also downgraded Rinker's credit rating to Baa2 from A3.theage.com.au? To hear more about movements on the Deloitte Victorian Index this week, go to www.theage.com.au and scroll to the business section.
© 2007 The Age