PERTH: The Australian sharemarket has reversed earlier gains and slipped into the red at noon, as all sectors outside the resource space record weakness amid a flurry of earnings reports.
The turnaround sees the local market tracking in the opposite direction to offshore leads, with Wall Street closing higher on fresh Greek optimism, higher oil prices and a bumper Berkshire Hathaway acquisition.
Just before noon, the Australian dollar plunged almost three-quarters of a US cent after the Chinese central bank said it was going to devalue the yuan amid signs of a deepening slowdown in the world’s second-largest economy.
The Australian sharemarket also pushed deeper into the negative territory on the news.
At 12.05pm (AEST), the benchmark S & P/ASX200 index was down 34.9 points, or 0.63 per cent, to 5474.3, while the broader All Ordinaries gave up 32.4 points, or 0.59 per cent, to 5472.5
While mining stocks started the session strongly, the sentiment may turn, with the Chinese yuan news.
A weaker yuan may be the stimulus China’s economy needs but will make iron ore and coal imports more expensive, which will weigh on Australia’s already hurting trade balance, as well as struggling resources companies.
BHP Billiton lifted 2.23 per cent to $26.58 while Rio Tinto gained 1.97 per cent to $54.80.
