Not surprisingly, Aussie stocks are in negative territory at noon after responding to a night of global turbulence. A suspected trading error sparked Wall Street’s biggest ever sell-off, creating widespread panic across world markets and causing investors to retreat from riskier assets.
The big banks are once again leading the declines, while resources stocks have gained ground after plunging earlier this week. The S&P/ASX200 index is 106 points lower at 4,467 and on the futures market, the SPI200’s down 103. In economic news: Building activity expanded for a second straight month in April amid a rebound in demand for apartment blocks. The Australian Industry Group-Housing Industry Association performance of construction index rose 4.8 points last month to a read of 55.8. The number is above the 50 level which separates expansion from contraction.
In company news: Rio Tinto Ltd (ASX:RIO) has approved the revival of a US$400 million iron-ore expansion project in Canada that was shelved in 2008. Rio’s Iron Ore Company of Canada operations will lead the expansion programme with the aim of increasing annual concentrate capacity by four million tonnes to 22 million tonnes by 2012. Rio’s iron ore chief Sam Walsh says the expansion shows the company’s confidence in iron ore as a commodity. Rio Tinto shares are down 0.21% at $65.55.
And engineering firm Worley Parsons Ltd (ASX:WOR) says it expects its full year earnings to be in line with guidance after an encouraging increase in activity among its customers. The company has confirmed that net profit for the 2010 financial year is likely to be between $280 and $320 million. It expects earnings growth in the second half of the financial year and is confident its medium and long-term prospects remain positive based on a competitive position and strong financial capacity. Shares in Worley Parsons are 3.65% lower at $24.54.
Turning now to indices: The market is a sea of red at midday, with all sectors in negative territory. The sector with the smallest losses is the Materials index, down 75 points at 11,423. Shares in St Barbara are up 4% at $0.26. Shares in Newcrest Mining and Lihir Gold are also higher at noon.
The worst performing sector is the Financials excluding the Real Estate Investment Trust index, down 194 points to 5,202. Shares in Westpac Bank have lost 4.26% to $24.03, while shares in Commonwealth Bank of Australia and National Australia Bank are also lower.
Looking to New Zealand and the NZSX50 is down 62 points. Taking a look at the top 4 stocks by turnover: Top of the list is once again Telecom of New Zealand. Stock is down 2.79% at $2.09 followed by; Fletcher Building, Mainfreight and Sky City Entertainment.
To gold and the dollar: Gold is trading at US$1,201.50 an ounce and the Aussie dollar is trading at 88.49 US cents.
