The Courier-Mail


Deutsche cuts out­look


WORLD mar­ket wor­ries led to a slump in the Aus­tralian share­mar­ket yesterday, end­ing its worst month since the global fi­nan­cial cri­sis.

As in­vestors fret­ted over the pos­si­bil­ity the US Fed­eral Re­serve could soon raise in­ter­est rates, the bench­mark ASX 200 yesterday slipped 56.6 points, or 1.07 per cent, to 5207.

The ASX 200 fin­ished down 8.6 per cent for the month, its worst monthly per­for­mance since Septem­ber, 2008.

Fed­eral Re­serve vice-chair­man Stan­ley Fis­cher said over the week­end that the US cen­tral bank would not wait for in­fla­tion to hit 2 per cent be­fore tight­en­ing pol­icy.

Op­tion­sX­press mar­ket an­a­lyst Ben Le Brun said a US rates rise would be the first in eight years and in­vestors were un­cer­tain how it could af­fect the US econ­omy.

IG chief mar­ket strate­gist Chris We­ston said the volatil­ity in the China mar­ket also re­mained “the heart of con­cern” for in­vestors.

The fi­nan­cial sec­tor was the main drag on the bourse yesterday, with a soft per­for­mance from the big four banks.

Fi­nan­cial stocks ended the ses­sion down 1.31 per cent. Com­mon­wealth Bank lost 1.68 per cent to $75.08, ANZ shares sank 2.1 per cent to $27.93.

Na­tional Aus­tralia Bank was off 1.3 per cent to $31.17, while West­pac re­treated 1.52 per cent to $31.10.

The con­sumer sta­ples sec­tor was deep in the red, off 2.48 per cent, with Wool­worths post­ing a large drop af­ter UBS warned of a price war risk. Wool­worths plunged 3.65 per cent to $26.40, Wes­farm­ers fell 1.91 per cent to $40.66.

Deutsche Bank yesterday slashed its out­look for the Aus­tralian share­mar­ket af­ter last Mon­day’s 4 per cent dive, fore­cast­ing the bourse would stay be­low 6000 points well into next year. Deutsche Bank said it would cut its yearend tar­get for the ASX200 in­dex to 5600 points, re­vised from its 6200 forecast.

The bank’s medium-term out­look also soured. It pre­dicted the bench­mark in­dex to hit 6000 points by the end of 2016.

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