Sharemarket and Market Trading News

A flat session on Wall Street last night as investors wait for tomorrow’s decision on US interest rates has prompted weakness on the Australian market. The All Ords is currently 22.2 points softer to an intraday level of 4540.

A pull-back in base metals overnight has inspired weakness in BHP. Traders prompted by the dip in the stock bought upside leveraging to a bounce using BHPIM3 Mar06 $21.00 Instalment, BHPDMA Jun06 $21.50 Instalment and BHPIM2 Mar06 $19.00 Instalment.

In the view of UBS, 2006 will be a story of two halves for the Australian economy, where the first six months is likely to produce better results than the second six months.

The broker expects the current moderate recovery in economic growth to continue for the next few quarters, but the fact high commodity prices have been masking issues for the domestic economy is likely to be revealed in the December half next year.

Gold has broken above $US500 an ounce it is soaring. The spot gold price jumped more than $US7 an ounce, or 1.4 per cent, in New York to close at a new 24-year high of $US529.50.

Gold rallied 4.6 per cent last week, its biggest weekly gain in almost four years, on heavy buying from the Middle East and Asia, where investors have been mopping up the precious metal to diversify from the US dollar and US-dollar-denominated assets.

The World Gold Council said demand for coins, bars and bullion-backed shares jumped 56 per cent in the July- September period.