Aussie stocks are lower at midday as weaker commodity prices hit resource stocks and cautious outlooks from companies cause investors to take a step-back. The top miners BHP and Rio are lower, with the major banks like Westpac and the Commonwealth Bank also weaker as concerns over Greece’s debt situation still linger.
The S&P/ASX200 index is 60 points lower at 4,894, and on the futures market, the SPI200’s down 73.
In economic news: Figures released by the ABS show a 2.7% fall in sales of new motor vehicles in March from the month before. Despite the drop sales remain well above those in March last year.
In company news: Yesterday global miner BHP Billiton Ltd (ASX:BHP) revealed that it was co-operating with the US Securities and Exchange Commission with an investigation relating primarily to certain terminated minerals exploration projects, where possible violations of anti-corruption laws have occurred in interactions with government officials. Today there are reports that the investigation relates to a bauxite exploration project in Cambodia. According to The Australian, BHP has admitted making a US$2.5 million payment to the community near the bauxite project, which a Cambodian government minister described as ‘tea money’, meaning unofficial payments to government officials. BHP denies this, saying the money was given to be used for the development of local welfare programs. However the Australian reports that an article in The Cambodia Daily in 2007 reported that BHP had made the payment to the government to secure exploration rights to a bauxite deposit. Shares in BHP fell 1.61% to $42.04.
Conglomerate Wesfarmers Ltd (ASX:WES) says third quarter sales for its Coles supermarket chain rose 4.9% compared to last year, however it is cautious going into the fourth quarter. Total sales for Coles food, liquor and convenience in the third quarter came to $6.915 billion up from $6.591 billion in the third quarter of 2009. Wesfarmers managing director Richard Goyder says the retail divisions’ sales performance in the third quarter is pleasing overall given the back drop of rising interest rates and the positive impact of the federal government’s fiscal packages on retail sales in the prior corresponding period. Mr Goyder says the group however, remains cautious on the outlook for the fourth quarter of the financial year, particularly given the impact of the federal government stimulus on trading last year. Shares in Wesfarmers lost 3.02% to $30.20.
Turning now to market indices: Majority of sectors are in the red at midday, however one of the only sectors in positive territory is the Telco Services index, up 4 points to 1,084. Shares in Telecom of New Zealand rose 0.91% to $1.66. Shares in Telstra are higher, while shares in Singapore Telecommunications are steady at noon.
The worst performing sector is the Materials index, down 214 points to 12,713. Shares in IronClad Mining fell 6.06% to $1.395, while shares in Andean Resources and OneSteel are also lower.
Looking to New Zealand and the NZSX50 is 1 point lower. Taking a look at the top 4 stocks by turnover: At the top is Telecom of New Zealand, stock up 0.47% at $2.16. Following the Telco is Fletcher Building, Fisher & Paykel Healthcare and Westpac.
To gold and the dollar: Gold is trading at US$1,145.60 an ounce and the Aussie dollar is trading at 92.54 US cents.
