Retail Data Damps Equities
May 16, 2011
Brokers said a 2.4% rise in seasonally adjusted July retail sales caused both bond and equity prices to weaken. As a result of the data, hopes for a cut in domestic interest rates faded. A fall in interest rates generally buoys equity prices because it reduces the cost of borrowing to companies and increases the attraction of shares that offer dividends with comparative yield terms. The All Ordinaries index of share prices fell 12.1 to 2244.6. Most market sectors closed lower, with the banking and finance subindex down 1.2% and the gold subindex down nearly 1.0%. The yellow metal was changing hands in Sydney around US$387.20 an ounce as the market closed. The September share price index futures contract on the Sydney Futures Exchange closed at 2237.0, down from 2254.0 Monday.
