The Australian share market fell more than one per cent today, responding to the US Federal Reserve’s comments that there’ll be no quick stimulus for the economy and China’s surprise interest rate cut, the first since late 2008.
The figures
Today, the S&P/ASX 200 index lost 45 points finishing the week steady at 4,064. On the futures market, the SPI is currently 46 points lower.
Looking at Wall Street, over its four trading days this week: The Dow Jones Industrial Average rose 68 points, the S&P 500 Index gained 5 points, the Nasdaq added 4 points, and the 100 Index rose 11 points.
Economic news
Australia’s trade deficit narrowed by more than $1 billion in April, falling to $203 million. Exports were up 3 per cent in adjusted terms while imports fell 1 per cent. And the demand for home loans grew 0.2 per cent in April.
Company news
Qantas Airways Limited (ASX:QAN) has been placed on a ratings watch by Standard & Poor’s as the airline’s shares tumbled to below a dollar. On Tuesday the company warned full year profit would fall around 90 per cent. About a billion dollars has been wiped off the market value of the airline this week. Qantas shares fell 8.49 per cent today, closing at $0.97.
Australia and New Zealand Banking Group (ASX:ANZ) will be passing on the RBA’s latest official rate cut in full. From June 15, the bank’s new standard variable mortgage rate will be 6.8 per cent. Chief executive Philip Chronican says reducing interest rates by 25 basis points for home borrowers and small business is the right decision and the other banks should do the same. Shortly after those comments, Westpac Banking Corporation (ASX:WBC) cut its variable home loan rate by 20 basis points, failing to pass on the Reserve Bank’s full rate cut. ANZ shares lost 1.15 per cent, closing at $21.56.
Echo Entertainment Group Limited (ASX:EGP) says chairman John Story has resigned. It follows pressure from shareholder James Packer to replace him with former Victorian premier Jeff Kennett. Mr Packer’s Crown Limited (ASX:CWN) has called off an extraordinary general meeting due next month.
And workers at BHP Billiton Limited’s (ASX:BHP) Olympic Dam mine have backed a four year deal that doesn’t include guaranteed annual pay rises but does offer a 25 per cent increase in shift loadings and a rise in employer superannuation contributions.
Best and worst performers
The sector with the smallest losses was Consumer Discretionary falling 4 points to close at 1,218. The worst performing sector was Industrials, losing 69 points to close at 3,260.
The best performing stock in the S&P/ASX 200 was Echo Entertainment Group Limited (ASX:EGP), rising 4.42 per cent to close at $4.49. Shares in The Reject Shop Limited (ASX:TRS) and James Hardie Industries (ASX:JHX) also closed higher.
The worst performing stock was Energy World Corporation Limited (ASX:EWC), dropping 12.33 per cent to close at $0.32. Shares in Qantas Airways Limited (ASX:QAN), and Dart Energy Limited (ASX:DTE) also closed lower.
IPO
Newfield Resources Limited (ASX: NWF) floated today with an issue price of 20 cents, opening price of 21 cents and closing price of 22.5 cents.
Commodities
Gold is trading at $US1,569 an ounce and is down $54.09 on the week. Light crude is $1.64 lower at $US83.18 a barrel.
The Australian dollar
The Australian dollar is buying 98.47 US cents and is one and a half cents higher over the week.