GM crisis rumours send equities way down south

GM crisis rumours send equities way down south

The Australian share market closed weaker yesterday following volatile trading fuelled by rumours that General Motors in the US was preparing to file for Chapter 11 protection.
The market plunged sharply as the rumour spread but rebounded after the speculation was negated within the US.
The ASX200 was 10.4 points lower at 4433 while the All Ordinaries dropped 11.4 points to 4389.2.
On the Sydney Futures Exchange the December share price index contract was 27 points weaker at 4428 on a volume of 15,946.
Patersons Securities private clients manager Steve Morris said it had been an average day, kicked off by a weak US lead overnight where high bond yields created fresh concerns about inflation and interest rates.
"We are probably pretty much in line with where we should be given the overseas action last night,"Mr Morris said. "It has been pretty mixed across the board and it is difficult to find clear winners around the place sector by sector."
He said the rumour that General Motors was in financial dire straits undermined confidence in the US economy, which could have seen the US market open sharply down.

At the end of local trading the major banks were mixed with National Australia Bank surging upwards 44 cents to $33.14 and Commonwealth Bank inching eight cents higher to $38.54.
Meanwhile, Westpac slid 10 cents lower to $20.40 and ANZ lost eight cents to $23.37.
Commodity prices pulled back overnight from recent gains taking the shine off some resource stocks.
BHP Billiton bucked the trend to find seven cents, pulling away to $20.49 as the miner posted record copper and nickel production for the September quarter with the assets of WMC Resources making a big impact for the first time. Rio Tinto was also tracking stronger, putting on 22 cents to $55.80.
Energy stocks stumbled with Woodside Petroleum shedding 63 cents to $31.40 and Santos losing 21 cents to $11.10.
The media sector was also weaker with Publishing and Broadcasting dropping 12 cents to $16.22 after the company said its gaming investments in Macau would pinch high rollers from its domestic casinos.
Fairfax also slumped 10 cents to $4.06 while News Corp slipped 15 cents lower to $20.15, with its non-voting shares following, losing 13 cents to $19.19.
Telstra gained four cents to $4.25 as it confirmed it was undertaking a review of its Hong Kong operations.
The retail sector lacked direction with Woolworths skipping 35 cents higher to $16.10 while Coles Myer edged seven cents lower to $9.89.
Shares in both Toll Holdings and Patrick Corporation strengthened as Toll pursues its $4.6 billion takeover of Patrick.
Toll piled on 27 cents to $12.65 while Patrick found seven cents to end at $6.77.
The price of gold dropped by 12.5 US cents to $US473.375 an ounce on the local market with gold stocks losing heat.
Shares in Newcrest Mining dropped 42 cents to $17.43 while Lihir shed three cents to $1.70.
The most traded stock was air conditioner provider AFT Corporation with 141.97 million shares traded, valued at a total of $4.98 million.
The stock was pushed half a cent lower to 3.1 cents.
National turnover was 1.26 billion shares traded worth a total of $4.03 billion with 421 stocks moving up, 533 down and 353 unchanged.
ANZ's senior currency strategist Craig Ferguson said the Australian dollar had gained as the US dollar weakened on rumours of GM's impending Chapter 11 bankruptcy.
GM said yesterday that it had been subpoenaed by the US Securities and Exchange Commission as part of an investigation into its accounting practices.
But it denied rumours of an impending bankruptcy.
At close of local markets the local currency was trading at 75.73 US cents, above the previous close of 75.59 US cents.
During the day's trade it reached a low of 75.25 US cents and a high of 75.86 US cents.
Mr Ferguson said otherwise it had been a quiet day for the local currency.
"The focus going into next week will be the (US) Federal Reserve and the likelihood of them raising rates which should support the US dollar and may cap any Aussie upside," he said.
The Australian dollar closed at 62.57 euro cents from 62.45 at yesterday's close and at 87.47 yen from 86.99.
The euro was at 1.2108 US dollars from 1.2106 and at 139.85 yen from 139.27.
The US dollar was at 115.47 yen from 115.11.
The Australian bond market closed slightly firmer, tracking US Treasuries which benefited from a flight to quality on the GM news.