Local stocks are trading flat at lunchtime in the East, slightly down from fresh 2012 and 17 month highs reached yesterday.
Another stalemate appears to have arisen in the US budget negotiations, with Republicans refusing to agree to tax hikes for Americans earning less than one million dollars. At the close of trade in the US, the Dow Jones Index was down 99pts or 0.7pct while European markets rallied ahead of the US close, on hopes a deal to avert the fiscal cliff would be reached. Financial stocks led the way in Europe, with the STOXX 600 Banking index up 0.5pct.
Mining stocks are pulling back, with the price of gold falling for the second consecutive session on reduced safe haven appeal. Comex gold futures closed down US$3 to US$1677.70 per ounce overnight. Shares in Australia's largest listed gold producer Newcrest Mining (NCM) are down 0.6pct to $22.43. BHP Billiton (BHP) shares are down 0.3pct to $36.95 while Rio Tinto (RIO) is lower by 1.1pct to $65.03. Fortescue Metals Group (FMG), which has so far had a great run in December, is trading lower by 2.6pct to $4.54.
Oz Minerals (OZL) saw its share price fall heavily yesterday down 10pct, with disclosure to the market today. OZL says it expects its copper output in 2013 to be down slightly on the year, and for its earnings this calendar year to be weighed down by lower commodity prices, reduced gold sales and increased production costs. OZL is today firmer by 3pct to $6.91.
Elsewhere retail stocks are generally firmer with Kathmandu (KMD) shares up 2.6pct to $1.585 and Myer Limited (MYR) up 0.7pct to $2.115.
However surf wear retailer Billabong (BBG) remains under pressure in the wake of yesterday's profit downgrade and concerns its fifth takeover of the year could fall over. BBG shares are down a further 6pct today to 80c.
The Australian dollar is worth US104.72c, £0.6442 and €79.23c.
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(Photo: REUTERS / )
Traders work on the floor of the New York Stock Exchange on May 1, 2012.