The benchmark index has slipped back below the 5,000 level despite a mildly positive lead from US stocks overnight. Dragging on the market is declines in resource stocks on weaker commodities prices, and profit taking.
The S&P/ASX200 index is 18 points lower at 4,967, and on the futures market, the SPI200’s down 26.
In economic news: The NAB March business conditions index rose 5 points to a read of 13, indicating the best conditions for Australian businesses in almost two years. Strengthening profits and increased demand for commodities helped to lift the index.
In company news: Rio Tinto Ltd (ASX:RIO) subsidiary, Energy Resources of Australia Ltd (ASX:ERA), says market conditions have softened during the first quarter of 2010 which will have an influence on prices in the first half. The company had previously advised that 2010 average realised sales prices were expected to remain broadly similar to 2009. The miner says production fell in the first quarter due to lower grades and the impact of seasonal weather. First quarter uranium output fell 27% to 888 tonnes compared to the same period a year ago. Average ore grade processed during the quarter of 0.17% uranium oxide was 41% lower than in the March 2009 quarter. Material mined for the March 2010 quarter dropped 60% compared to the March quarter of last year. Shares in Energy Resources of Australia fell 5.43% to $18.62.
In an update on the efforts to gain control of Macarthur Coal Ltd (ASX:MCC) the miner continues to recommend that shareholders vote in favour of the Gloucester Coal Ltd (ASX:GCL) and Middlemount transactions. In response to New Hope Corporation Ltd’s (ASX:NHC) letter to shareholders yesterday, Macarthur reiterates that it does not believe the New Hope proposal superior to the takeover of Gloucester and Middlemount transaction. Meanwhile second largest shareholder in Macarthur, ArcelorMittal says it is yet to make a decision on whether it will support the miner’s plan to buy rival Goucester. Shares in Macarthur Coal declined 1.45% to $16.28.
Turning now to market indices: The best performing sector at midday is the Utilities index, up 18 points at 4,500. Shares in APA Group added 2.2% to $3.72. Shares in SP AusNet and AGL Energy are also higher at noon.
The worst performing sector is the Energy index, down 185 points to 16,219. Shares in Energy Resources of Australia are weaker, price as mentioned before, while shares in Karoon Gas Australia and Mantra Resources are also lower.
Looking to New Zealand and the NZSX50 is 4 points lower. Taking a look at the top 4 stocks by turnover: Telecom of New Zealand is at the top of the list with stock up 0.91% at $2.22 followed by; Telstra, Guinness Peat Group and ING Property Trust.
To gold and the dollar: Gold is trading at US$1,153.30 an ounce and the Aussie dollar is trading at 92.54 US cents.
