(IBTimes) - Lunchtime REPORT
(12.20pm AEST)
The Australian share market improved slightly yesterday, with
the All Ordinaries Index (XAO) rising by 14.3 points to 4,375
points. But the gains were short lived as more concerns over
Greece and Spain hit European markets overnight and pushed euro
and US stocks lower. Once again the likely hood of Greece leaving
the Euro is front page news and the Spanish government overnight
saying it would most likely have to bail out the 4th largest
listed bank in Spain Bankia, to stop it for going under. Bankia
had the largest exposure to the loss making property market in
Spain and Portugal, and the bank could need up to €10 billion to
survive. The political uncertainty in Greece saw its stocks
market fall another 3.6% overnight. As the leader of Greece´s far
left-wing Syriza Party said that if he was to form any part of
the new coalition government he would look at "tearing up the
terms of the European Union and International Monetary Funds
(EU/IMF) bailout deal and start again.
The 2012 Federal budget was released overnight, but the market
did not really react to any set outcomes.
It will be a tough ask for the current government to meet its
planned budget underlying cash position turnaround from a deficit
near $44 billion dollar in the current financial year to a
surplus of $1.5 billion in the next. The impact of the rollout of
the mining tax has given the government money to spend on
Families and services. The implementation of the carbon tax in
the next financial year has prompted the government to boost
upfront payments this could help restimulate the ailing retail
sector.
By lunchtime the All Ordinaries Index (XAO) had lost 40 points
to 4,337 points, with weakness in the mining, banking and energy
sectors, with the telecommunications and media sectors moving
higher.
Commodity prices continued to fall overnight, with the US oil
price still at 12 week lows, the US oil price is now trading at
US$97.00 a barrel. S&P/ASX 200 Energy sector gave back
yesterday's gains and feel 1.84%, with the biggest slides in the
small to medium oil and uranium stocks. Woodside Petroleum
Limited (WPL) lost 2.6% to $33.45 as Santos Limited (
STO
) moved lower, down 1.5% to $12.86. Origin Energy Limited (ORG)
was lower by 0.9% also trading at $12.86 and Oil Search Limited
now at $6.98.
Our big name mining stocks hit hard overnight and at the start
of trade today. Today the S&P/ASX 200 Materials sector lost
1.64 % at lunch. Rio Tinto Limited (
RIO
) down by 1.37% to $62.43 while BHP Billiton Limited (
BHP
) lost 0.95% to $34.34. Our largest listed gold miner, Newcrest
Mining Limited (NCM) was off by 3.5% to $25.22 and Kingsgate
Consolidated Limited (KCN) off over 6% to $5.55, after the US
gold price fall again overnight to US$1,600 an ounce off over
US$35 an ounce, hitting a 2012 low.
The S&P/ASX 200 Financials sector was hit again off 0.68%,
with weakness across the board in the four major banks and key
insurers. Westpac Banking Corporation (
WBC
), the best of a bad lot, off 0.13% to $22.80, Commonwealth Bank
of Australia (
CBA
) down over 1% to $51.54. National Australia Bank Limited (NAB)
lost 0.28% to $24.76. Australia and New Zealand Banking Group
Limited (ANZ) was off 0.5% to $23.00, while merchant bank
Macquarie Group Limited (MQG) also down over 1% to $27.18.
S&P/ASX 200 Consumer Staple sector fell into the red from
the start of trade today, off 0.06% one of the better performing
sectors. Today our 2 largest food retailers Woolworths Limited
(WOW) higher in morning trade up 0.49 % at lunch to $26.63 and
Wesfarmers Limited (WES), the owner of Coles and Bunnings, lost a
few cents to $30.12. While there smaller rival in the grocery
space, Metcash Limited (MTS) added more ground up 0.50% in early
trade to $4.09. Billabong International Limited (BBG) today
announced it will change its CEO replacing Derek O´Neill with a
former Target boss, Launa Inman. The highly respected, head of
BBG's US business, Paul Naude, has also been promoted to
"President of the Americas". BBG's share price fell 1.88% to
$2.35.
Elsewhere, Telstra Corporation Limited (TLS) added 0.83% to
$3.65 on a positive broker report and Leighton Holdings Limited
(LEI) up 0.88% to $19.42 after saying it had been named preferred
contractor for the major iron ore producer Fortescue Metals
Group's (FMG) Solomon iron ore project in WA´s Pilbara.
Leighton's share price added 2.4% to $19.48, while Fortescue only
lost 0.47% to $5.32.
The Australian dollar (AUD) continued to trade lower and buys
US$100.70 cents. The AUD is currently trading at €77.66
cents.
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Original Source:
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