Oil price fears send investors running for safety
Sydney Morning Herald
Friday February 25, 2011
INCREASING violence in the Middle East and fears it could spill in to big oil producers like Saudi Arabia pushed the bourse into its longest losing streak in eight months.The sharemarket closed in the red for the fifth day in a row.The benchmark S&P/ASX 200 fell 36.6 points, or 0.76 per cent, to 4809.3, while the broader All Ordinaries index was down 34.5 points, or 0.7 per cent, at 4901.1.Australia was not alone in feeling the thud of the Middle Eastern dominoes. The unrest sent ripples throughout world markets, with Wall Street falling sharply for the second day in a row.Despite investors fearing the violence could greatly cut oil supplies, fuel inflation and dampen world economic recovery, Prasad Patkar of Platypus Asset Management said there was no need to panic."People aren't as risk hungry as they were last week, but it's not anything sinister at this stage. Everything is fairly orderly. Unless this enters into a new level of uncertainty and turmoil and something like Saudi Arabia has a problem, you would expect things not to spin out of control."The energy sector was the worst performer yesterday, falling 1.17 per cent, even though oil prices hit 2-year highs.Woodside fell 63, or 1.48 per cent, to $41.85 after it went ex-dividend. Origin Energy fell 57, or 3.46 per cent, to $15.91, after it posted a first-half net loss of $136 million, compared with a profit of $371 million a year earlier. It cited costs relating to its bid for NSW's state-owned energy assets and write-downs on a geothermal energy investment for the downfall.Gold closed at the December record of $US1430 an ounce, as investors shed riskier assets.Insurance Australia Group fell 4 to $3.63 after posting a 51 percent fall in first-half net profit to $161 million and cut full-year guidance due to the expected cost of the earthquake in Christchurch.Another insurer, Suncorp, fell 21, or 2.44 per cent, to $8.39, and QBE fell 4 to $18.25.The gambling machine supplier Aristocrat Leisure rose 2 to $3.18 after booking a net profit last year of $77.19 million, compared with a loss of $157.8 million in the previous year.BHP Billiton fell 58 to $45.99 and Rio Tinto fell 71 to $84.25.The big banks also finished lower.
© 2011 Sydney Morning Herald