The Australian sharemarket ended the week on a negative note following the release of disappointing Chinese trade data which signalled further weakness in the global economy.
At the close on Friday, the benchmark S&P/ASX200 index was down 31 points, or 0.72 per cent, at 4,277.3, while the broader All Ordinaries index was down 27.3 points, or 0.63 per cent, at 4,302.8.
On the ASX 24, the September share price index futures contract was 20 points lower at 4,255 with 25,379 contracts traded.
The market plunged after China released figures showing trade growth in July suffered an unexpectedly sharp decline, in a new sign of weakness for the world economy.
Chinese exports rose just one per cent over a year earlier, down from June’s 11.3 per cent growth rate and below forecasts of about five per cent.
Chinese imports rose 4.7 per cent, down from the previous month’s 6.3 per cent.
CMC Markets senior trader Tim Waterer said the local market reacted adversely to the figures.
“The market was sort of undecided in the early part of trading today. We had a mildly weaker lead from Wall Street but once the Chinese data came in, that really determined the fate of our index with a negative finish.”
Mr Waterer said investors were caught off guard by the trade balance figures, with expectations missing the mark by “quite a large margin”.
It sent traders heading more towards lower risk assets, he said.
However, Mr Waterer said that the market’s dampening could be short-lived as hopes grow that the Chinese central bank will act by loosening monetary policy.
“With the recent spate of Chinese economic weakness, it may bring forward the timeline on a Chinese interest rate cut.
“So that may actually serve to prop up the (local) market and limit any moves on the downside,” he said.
The resource giants closed lower on the trade figures, with BHP Billiton losing 11 cents to $32.69 and Rio Tinto shedding 41 cents to close at $56.45.
The major banks were the among the main underperformers, although ANZ was the sole gainer ending two cents higher at $23.84. National Australia Bank lost 24 cents at $25.18, Westpac lost 40 cents to $23.61 and Commonwealth Bank was the worst performer shedding $1.09 to end the week at $55.94.
In local equities news, shares in property management and development company Goodman Group ended six cents higher to $3.86 after it said net profit had increased by 4.2 per cent in the year to June 30.
Casino operator Crown closed three cents higher to $8.56 after reporting a full year net profit growth of $513.3 million, up 53 per cent from last year.
In local economic news, the Reserve Bank of Australia upgraded its economic growth forecasts in its latest quarterly statement on monetary policy released Friday.
The central bank expects annual gross domestic product to have expanded by 3.75 per cent in 2011/12, up from the 2.75 per cent it predicted three months ago.
National turnover was 1.87 billion shares worth $3.93 billion with 469 stocks up, 434 down and 320 unchanged.
