Australian stocks fell today, following U.S. markets overnight. Local financials were sold off as the market lost confidence in the recent rally and on concerns the U.S. banking sector had a longer term recovery. Energy stocks also posted heavy losses today.
The S&P/ASX 200 Index closed 76 points lower at 4,438 while on the futures market, the SPI200’s down 86.
The economic news of the day was: The ABS saying Australia’s GDP rose 0.6 per cent in the second quarter after a 0.4 per cent rise in the first quarter. Economists had expected a rise of just 0.2 per cent and the better than expected result could increase the chances of interest rate rises in the short term.
To company news around this afternoon: BHP Billiton (ASX:BHP) says it believes it is achievable to ease congestion at the world’s busiest coal port, Newcastle coal port by long term reform. The comments come after the BHP-backed Newcastle Coal Industry Group failed to agree on a long term port sharing plan by the August 31 deadline. Yesterday Australia's competition regulator withdraw its anti-trust immunity for an interim pact which could cause a further surge in vessel queues. BHP said today it is in talks with the government to resolve a number of "critical issues" with the proposed plan but believes an industry supported solution is possible and can be achieved. BHP shares closed 1.74% lower at $36.64.
Seven Network (ASX:SEV) said its subsidiary Vividwireless, will spend $50 million on a new fourth generation wireless broadband network in Perth by March. Seven said the network would deliver the best wireless broadband in Australia by using the latest standard in technology and said Perth was chosen as the first capital city to launch it in. Seven Network shares closed steady at $6.36 today.
Also making news today: Agricultural chemicals business Nufarm (ASX:NUF) said that talks are continuing with China's largest chemicals trader, Sinochem, about a potential takeover but no further details could be released at this stage.
Shares in Nexus Energy (ASX:NXS) lost ground and were the worst performing on the S&P/ASX200 index as the company said it had raised around $31 million through an institutional placement which had avoided a fire sale of assets.
Taking a look at some of the stories covered in our earlier reports: Telstra (ASX:TLS) has appointed two new non-executive directors, energy industry leader Russell Higgins, and Microsoft executive Steve Vamos to its board.
National Australia Bank (ASX:NAB) will write down its receivables from the ATO by $309 million to zero. In other NAB news, the bank and credit union automatic teller machine administrator Cuscal have combined their ATM networks after receiving approval from the ACCC.
Now to the best and worst performers: The best performing sector at close was the Health care index, up 42 points to 8,469; while the worst performing sector was the Energy index; down 432 points to 15,826.
The best performing stock in the S&P/ ASX200 was Transpacific Industries and shares jumped 6.23 per cent to $1.62. Astro Japan Property Trust and Tower Australia shares also gained.
The worst performing stock was Nexus Energy and shares fell 11.39 per cent to $0.35. Shares in PMP closed lower and Gunns shares declined as Gunns completed the institutional component of its entitlement offer.
In commodities, gold is trading at $955 U.S an ounce and light crude is up 52 cents at $68.57 U.S a barrel.
