Aussie stocks have sunk into the red at midday, following Wall Street’s negative lead to take their biggest tumble in three months. The resources sector is leading the losses for the third consecutive day as analysts slash valuations on the back of the proposed new mining profits tax.
The S&P/ASX200 index is 81 points lower at 4,657 and on the futures market, the SPI200’s down 85. In economic news: Activity in Australia’s services sector expanded in April, as sales, new orders and employment all improved. The Australian Industry Group/Commonwealth Bank performance of services index rose 3.4 points last month to a read of 52.3. The level of 50 separates expansion from contraction.
In company news: Origin Energy Ltd (ASX:ORG) has warned that the proposed new mining tax could add significant costs to its liquefied natural gas joint venture with ConocoPhillips. The company says the uncertainty attached to the planned 40% super profits tax could also affect the project’s schedule. Origin and ConocoPhillips want to make a final investment decision on the project by the end of the year and start shipping LNG by late 2014. Shares in Origin Energy fell 2.76% to $15.13.
And Macarthur Coal Ltd (ASX:MCC) has forecast a full year profit in the range of $103 to $113 million, down almost 39% on last year’s result. The profit downgrade comes as the miner today announced it has extended the acceptance period for its takeover offer for Gloucester Coal until May 27. CEO and Managing Director Nicole Hollows says the guidance is based on Macarthur achieving its targeted annual sales volume of 4.8 to 5 million tonnes. Meanwhile, Peabody Energy has asked for more information on the proposed resources super-profit tax after completing its due diligence on Macarthur Coal yesterday. Macarthur Coal shares are down 3.96% at $13.08.
Turning now to market indices: The best performing sector at midday is the Consumer Staples index, up 58 points at 7,367. Shares in Coca-Cola Amatil rose 0.89% to $11.32. Shares in Metcash and Woolworths are also higher at noon.
The worst performing sector is the Energy index, down 445 points to 14,615. Shares in Bow Energy declined 9.84% to $1.10, while shares in Linc Energy and Caltex Australia are also lower.
Looking to New Zealand and the NZSX50 is down 42 points. Taking a look at the top 4 stocks by turnover: Top of the list is Telecom of New Zealand stock is down 1.82% at $2.16 followed by; Fletcher Building, OceanaGold Corporation and Sky City Entertainment.
To gold and the dollar: Gold is trading at US$1,167.80 an ounce and the Aussie dollar is trading at 91.04 US cents.
