Market Wrap: Aus shares close 1.2% lower

Market Reports

Despite a positive lead from Wall Street, the local share market fell into the red at the start of the session and continued to lose momentum throughout the day, closing 1.2 per cent lower. Today the big banks proved to be the biggest drag on the market, with CBA leading the losses, closing down 1.4 per cent. It was also a bad day for the energy and materials sectors, with mining giants BHP and Rio Tinto losing ground. 
 
The S&P/ASX 200 index closed 60 points lower to finish at 4,946. 
 
The value of trades was $4.8 billion on volume of 784 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited (ASX:BHP), Commonwealth Bank of Australia (ASX:CBA) and Westpac Banking Corporation (ASX:WBC).
 
On the futures market the SPI is 7 points higher. 
 
Economic news

Inflation has increased for the December quarter, according to the latest figures from the Australian Bureau of Statistics. The Consumer Price Index lifted 0.4 per cent for the quarter, bringing the rate for the year to 1.7 per cent. The figure remains below the RBA’s target range for inflation of between 2 and 3 per cent. 

Company news

Drillsearch Energy Limited (ASX:DLS) says shareholders have approved the scheme of arrangement to implement the proposed merger with Beach Energy. At the meeting today, 99 per cent of votes were cast, and 94 per cent of shareholders voted in favour of the merger. Shares in Drillsearch closed 3.03 per cent lower at $0.48. 
 
Medical Developments International Limited (ASX:MVP) has received approval from the FDA to sell its new range of anti-static respiratory devices in the USA. The company says the approval represents a significant opportunity to build MVP’s global respiratory business. Shares in Medical Developments International closed 14.37 per cent higher at $3.82. 
 
Rio Tinto Limited (ASX:RIO) has reached a binding agreement for the sale of its Mount Pleasant thermal coal asset to MACH Energy Australia for $US224 million plus royalties. 
 
Oil Search Limited (ASX: OSH) says performance for the quarter ended 31 December 2015 has resulted in all-time record production for the company.
 
McGrath Limited (ASX:MEA) has announced the opening of its second Melbourne franchise office in the city’s south-east suburb of Mount Waverley.
 
Best and worst performers

The best performing sector was REITs adding 0.6 per cent to close at 1.297. The worst performing sector was Energy, losing 2.3 per cent to close at 7,078 points.
 
The best performing stock in the S&P/ASX 200 was AWE, rising 56.94 per cent to close at $0.57. Shares in Pacific Brands and Slater and Gordon also closed higher.
 
The worst performing stock was Ten Network, dropping 13 per cent to close at $1.30. Shares in GUD Holdings and Worley Parsons also closed lower. 
 
Commodities and the dollar

Gold is trading at $US1,120 an ounce.
Light crude is $0.17 higher at $US30.51 a barrel.
The Australian dollar is buying $US0.7024.