Australian share market falls on jobless rise

13:19, August 12, 2010      

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The Australian stock market remained weak on Thursday after a poor performance on global markets and a lift in the domestic unemployment rate.

The market also took a dim view of weak profit results from telecommunication company Telstra, and Qantas airline.

The benchmark S&P/ASX200 index was down 63.9 points, or 1.43 percent, at 4,391.6 points, while the broader All Ordinaries index had slipped 65.2 points, or 1.46 percent, to 4,414.5 points.

On the Sydney Futures Exchange, the September share price index contract was 71 points lower at 4,360 points, with 21,204 contracts traded.

CityIndex market strategist Michael McCarthy said downbeat sentiment continued to drive the market following negative leads from offshore overnight, with investors concerned on bleak signs for the U.S. economy.

"The FOMC (Federal Open Market Committee) announcements on Monday night were quite disturbing for the market," McCarthy told The Australian newspaper on Thursday.

"Although it is being painted as an ongoing stimulus, taking money from maturing mortgage securities and putting it into treasuries is actually withdrawing money from the private system.

"The market has become very concerned.

"The data supports the idea that clearly a global economic recovery is coming on - it is not the v-shaped recovery we were looking for -- it will continue to be patchy and will vary enormously by region."

McCarthy also said a rise in Australia's unemployment rate to a seasonally adjusted 5.3 percent in July, compared with an unrevised 5.1 percent in June, was adding to global fears.

The Australian dollar fell 0.25 U.S. cents after the release of the jobs data at 11.30a.m. (Australian time).



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