Market drops as investors cash out

Try as it might, the sharemarket could not counter profit-taking in the heavyweight resource and energy stocks yesterday despite the banks and insurers putting in strong performances.
As the earnings season draws to a close, investors are starting to turn their attention to the broader health of the economy as they try to determine whether companies' earnings are sustainable.
The benchmark ASX 200 index fell 2.8 points yesterday to 4921.3 - still within 35 points of its February 2 record high. The broader All Ordinaries index dropped 1.7 points to 4878.4.
ABN Amro's head of Sydney trading, Justin Gallagher, said the volatility was continuing as investors took profits in large resource stocks whenever they spiked.
"The financials were definitely the flavour of the day while resources were effectively the whipping boys of the market," he said.
"The market is looking for what is going to be the next big catalyst to drive the global economy and our market higher. Earnings numbers are continuing to support the market at this level, however there is still an air of caution."
The resource heavyweights did most of the damage to the indices yesterday as Rio Tinto fell more than 2 per cent, or $1.80, to $71.20 and BHP Billiton dropped 41c to $24.25.
In energy, Woodside fell more than 2 per cent, or 87c, to $40.49 after oil prices dropped overnight on the back of supply concerns easing in the Middle East. Santos dropped 19c to $11.32.
"I don't think we have seen any fundamental shift in the way people are viewing the market, but we are going to continue to see them take advantage of spikes in the stocks," Mr Gallagher said.
Home and car insurer Promina rose 18c to $5.45 after it boosted its annual profits and surprised investors with a special dividend. Among its peers, Axa Asia Pacific jumped 10c to $5.85 and QBE fell 32c to $20.70.
Resources and engineering company WorleyParsons was the star performer after it posted a 142 per cent jump in half-year profits to $61.79 million. The stock soared more than 18 per cent, or $2.48, to $15.90.
Woolworths also continued to benefit from its positive profit result on Monday and the promise of further earnings growth, rising 48c to $18.40.
National Australia and ANZ both closed at record highs - NAB rising 13c to $36.68 and ANZ 6c to $25.72. The Commonwealth jumped 35c to $44.85 and Westpac fell 12c to $23.61.
Meanwhile, monopoly wheat exporter AWB continued to suffer from the inquiry into kickbacks paid to Saddam Hussein's regime in Iraq, falling almost 4 per cent, or 11c, to $3.77. Since the Cole inquiry began on January 16, the stock has fallen more than 40 per cent.
Macquarie Equities private client adviser David Halliday said the market was beginning to appear over valued, but investors were still prepared to reward companies which delivered positive earnings figures.
More than 85 per cent of the market by capitalisation has reported results, with earnings per share growth at about 22 per cent.
"It's not a surprise that the market is within a whisker of an all-time high because Australian companies are tending to deliver good profits for their shareholders," he said.
"The question is how long can they continue to do that in the face of a slowing domestic demand picture and rising costs."
He said earnings results were still driving the market, but he believed much now hinged on the direction of commodity prices. It was difficult to foresee any sector other than resources pushing up the bourse, he said.