Following weak leads, the Australian share market has tanked in early trade and is 1.25 percent lower at noon. The big banks off to a dire start as soft earnings from Westpac drag the local bourse lower. Telstra providing some silver lining; shares in the telco are on the up following the announcement it will be handing $1.5 billion back to investors after selling the majority of its stake in Autohome.
The S&P/ASX 200 index is 66 points down at 5,187. On the futures market the SPI is 66 points lower.
Economic news
Annual inflation slowed to 1.5 percent from 1.7 percent in April. Data released by the Melbourne Institute fell despite a boost in petrol and health care costs. Meanwhile the NAB has said business confidence and conditions continue to expand but at a slower rate according to data also released this morning.
Company news
Virgin Australia Holdings Limited
(ASX:VAH) has reported a statutory loss after tax of $58.8 million for Q3 FY16. The company has announced it will reduce Group capacity by 5.1 percent in the fourth quarter with domestic reductions focused on regional routes. The airline said that given market conditions it expects underlying profit before tax in the range of $30 million to $60 million for FY16. Shares in Virgin Australia are trading steady at $0.35.
Slater and Gordon Limited
(ASX:SGH) has successfully agreed with its lenders bank facility amendments. Managing Director Andrew Grech noted the law-firm remains focused on improving profitability and cash flow and reducing debt. The company said the support from its lenders was considered a positive and clear endorsement of the company’s performance improvement program. Shares in Slater and Gordon are trading up 84.75 per cent at $0.55.
Best and worst performers
The best performing sector is Telcos, gaining 1.09 per cent to 1,995. Shares in Telstra have risen 1.21 per cent and trading at $5.42. Shares in TPG Telecom and Vocus are also stronger.
The worst performing sector is Financials excluding REITS, falling 3.34 per cent to 6,318. Shares in Westpac have fallen 5.54 per cent, trading at $29.33. Shares in Macquarie Group and NAB are also lower.
Gold and the dollar
Gold is trading at $US1,293 an ounce.
The Australian dollar is buying $US0.7613
