The S&P-ASX 200 index tumbled as low as 3516.8 points in morning trade before rebounding in afternoon trade to close up 0.3% at 3581.2 points while the All Ordinaries finished up 0.2% at 3521.7 points.
The Commonwealth Bank weighed down on the market today with its share price falling by as much as 11% after it emerged from a trading halt following finalising its $2 billion raising at $26 a share.
Yesterday, the bank was forced to scrap its original raising at $27 a share after investors were outraged by the release of a profit warning.
Mining heavyweights were mixed with Rio Tinto shedding 0.79% to close at $40, while BHP Billiton gained 0.16% to $31.
BHP assured shareholders today that it was well placed to ride out the global downturn in commodity markets.
“As to the future, I want to be very clear that BHP Billiton, as a standalone company, is in a strong financial and operating position,” BHP chairman Don Argus said.
Argus also conceded he did not expect BHP to avoid the current slump in commodity demand.
“Uncertainty in the world’s commodity markets remains particularly high in the short term, and we do not expect to be immune from these changes,” he added.
Meantime, iron ore hopeful Centrex Metals’ deal with Wuhan Iron & Steel Co (WISCO) to establish a South Australian magnetite joint venture failed to excite the market.
Under the deal, WISCO will purchase a 50% stake in Centrex’s Southern and South Central Eyre Peninsula magnetite deposits for 18c per tonne of inferred resources for up to 1 billion tonnes.
WISCO will also take a 15% stake in Centrex, by subscribing for 39 million shares at 25c per share, costing $9.7 million.
However despite the news, shares in Centrex closed the day only 2.2% higher at 23c.
Iron ore play Fortescue Metals Group ended the session at $2.36, down 4.5%, Alumina fell 6.4% to $1.31 and Iluka Resources fell 3.5% to $4.63.
The spot price of gold rallied overnight and traded as high as $US881.20 an ounce on follow-through buying and weakness in the US dollar.
In today’s session, gold was trading at $864.25/oz down 0.31% at 4:26pm EDT.
Precious metal plays on the Final Call watchlist were trading higher today with Newcrest Mining up 2.7% at $A30.36, Lihir Gold up 2.6% at $2.74, while Sino Gold fell 4.6% to $4.37 and Newmont Mining fell 1.8% to $5.60.
According to a report on Dow Jones Newswires, Standard Bank says base metals have failed to respond to the lower US dollar following the US Federal Reserve’s rate cut.
The bank said that while the cut was a positive move, it did little to improve the immediate economic outlook and therefore demand prospects for industrial metals.
“Consumer confidence is shot to pieces, unemployment is rising in many countries, and access to credit – even if the consumer confidence was there – has been reined in dramatically,” the bank said.
The bank added that prices will likely remain subdued until sentiment improves and until the markets feel confident enough to be able to anticipate a pick-up in metals demand.
London Metal Exchange three-month copper closed down 1.6% at $US3020 per tonne.
