The local share market is lower at midday after stocks on Wall St and European markets tumbled overnight causing concern for the health of the global economy. Resources stocks led the declines after a fall in copper, oil and gold prices.
The S&P/ASX200 index is 54 points lower at 3,823 and on the futures market the SPI 200’s down 75 points.
In economic news: The Australian Industry Group/Commonwealth Bank Performance of Services Index rose 10.3 points to a read of 50.2 in June. The read edged above the 50 mark that separates expansion from contraction for the first time in 15 months.
To business news at midday: Global miner BHP Billiton Ltd (ASX:BHP) says it has agreed to sell its Yabulu nickel refinery in Queensland for an undisclosed amount, and will book US$675 million in write-downs on the sale of the asset. BHP says it will write-down the carrying value of Yabulu by an estimated $500 million U.S. and a further estimated $175 million U.S. of unrecoverable tax benefits. The Yabulu nickel refinery is to be sold to companies wholly owned by Professor Clive Palmer, founder and executive chairman of Mineralogy. BHP shares fell 2.86 per cent to $33.32.
Wood-chipping company Gunns Ltd (ASX:GNS) has acquired a 17.9 per cent stake in Forest Enterprises Australia at 10 cents a share. The company says it will fund the purchase through the placement of 5.7 million of Gunns shares and a cash payment of $1.58 million. Gunns says the investment recognizes the strategic importance to the forest industry of further consolidation. Shares in Gunns lost 1.53 per cent to 96.5 cents.
Turning now to market indices: All sectors are in negative territory at midday, however the sector with the smallest loss is the Consumer Staples index down 33 points to 6,532. Shares in Metcash are up 0.24 per cent to $4.26. Shares in Lion Nathan are flat while shares in Foster’s Group are slightly lower at noon.
The sector at midday with the biggest loss is the Materials index down 223 points to 9,781. Shares in Murchison Metals are down 5.34 per cent to $1.595. Shares in Extract Resources and Fortescue Metals Group are also lower at noon.
Looking to New Zealand and the NZSX50 is 16 points lower.
Taking a look at the top five stocks by value on the NZSX50: Fletcher Building heads the list, stock down 0.61 per cent at $6.48, followed by Telecom of New Zealand, Auckland Airport, Westpac and Infratil NZ. To gold and the dollar: Gold is currently trading at $934.10 US an ounce and the Aussie dollar is trading at 79.65 US cents.
