The Australian share market fell as much as 1 per cent in morning trade, stung by weak US, Chinese and local economic news ahead of the key monthly US jobs report tonight.
The S&P/ASX 200 index has shed 30 points and is 4,047. On the futures market the SPI is 22 points lower.
Economic news
The latest figures on Chinese manufacturing have come in lower than expected, sparking more fears the world’s second largest economy is slowing. China’s official Purchasing Managers Index (PMI) dropped to 50.4 in May from 53.3 the month before.
In local economic news house prices and manufacturing activity in Australia have continued to fall: Despite the RBA’s rate cut of 50 basis points last month, according to RP Data residential property values across capital cities lost 1.4 per cent last month and are down 5 per cent from the same time a year earlier.
Manufacturing activity contracted to an eight month low last month. According to the Australian Industry Group-PricewaterhouseCoopers, the performance of manufacturing index pulled back 1.5 points to 42.4 in May, below the 50 level that separates expansion for contraction.
Movers at midday
Shares in Elders Limited (ASX:ELD) jumped after Ruralco Holdings Limited (ASX:RHL) said it has bought a 10.1 per cent stake in the agribusiness for undisclosed amount. Ruralco says this is a strategic investment and there is no current intention to make a takeover offer for Elders. Shares in Elders Limited have jumped 16.22 per cent and are trading at $0.21.
Shares in Emeco Holdings Limited (ASX:EHL) have fallen after announcing its Indonesian subsidiary is pursuing legal action. The mining equipment manufacturer says it considers the claim made against it from Kideco as baseless and without merit and will be pursuing $US1.95 million in debt recovery against Kideco through Indonesian courts. Shares in Emeco Holdings have fallen 2.6 per cent and are trading at $0.94.
Best and worst performers
The best performing sector is Telco Services gaining 13 points to 1,232. Shares in Telstra Corporation Limited (ASX:TLS) have risen 1.2 per cent and trading at $3.60. Shares in Singapore Telecommunications Limited (ASX:SGT) are higher while and TPG Telecom Limited (ASX:TPM) are lower.
The worst performing sector is Materials, falling 199 points to 9,589. Shares in Aquarius Platinum Limited (ASX:AQP) have fallen 10.63 per cent, trading at $1.07. Shares in BlueScope Steel Limited (ASX:BSL) and OneSteel Limited (ASX:OST) are also lower.
Gold and the dollar
Gold is trading at $US1,554 an ounce.
The Australian dollar is buying 96.72 US cents.