Market Wrap: Shares close the week lower

Market Reports

The local share market has finished a roller coaster day deep in the red to cap off its worst week since the peak of the global financial crisis in November 2008.

Aussie stocks took a beating early in the day after a suspected trading error sparked Wall Street’s biggest ever sell-off, but the market clawed back some its losses this afternoon on news that G7 finance ministers will hold crisis talks over Greece’s financial woes. The S&P/ASX 200 Index closed 93 points lower at 4,481, down 337 points on the week, while on the futures market, the SPI200’s down 99.

Looking to the U.S. and on Wall Street, the Dow Jones industrial index closed 488 points lower on the week. The S&P500 Index fell 59 points, the NASDAQ lost 142 and the 100 index fell 107 points.

In economic news: The Reserve Bank has lifted its forecasts for inflation and economic growth, warning that interest rates will need to rise further. In its May Statement on Monetary Policy, the central bank expects inflation to increase by 3.25% in the year to June 2010, up from its previous forecast of 3%. Gross domestic product (GDP) is likely to grow by 3.75% in the year to June, 2011, up from the 3.5% predicted in February.

To company news around this afternoon: Electrical goods retailer JB Hi-Fi Ltd (ASX:JBH) has confirmed its full-year earnings guidance despite sales for March and April falling below expectations. The company expects to post a profit of between $117 and $120 million and has reconfirmed sales guidance of about $2.8 billion. But it says it is taking a cautious approach as it expects recent interest rate rises to impact consumer spending. JB Hi-Fi shares closed 1.12% stronger at $18.98.

New Virgin Blue Holdings Ltd (ASX:VBA) boss John Borghetti could earn up to $4.5 million in his first year in the job - $1.8 million more than his predecessor Brett Godfrey made in any year. The Sydney Morning Herald reports that under the terms of his contract released today, Mr Borghetti will earn a base salary of $1 million a year, plus a $1 million cash bonus if he meets short-term performance targets. The former senior Qantas executive will also be eligible for up to $2.5 million in his first year if he meets long-term incentive targets. He officially starts the new job tomorrow. Shares in Virgin Blue Holdings closed 5.77% lower at $0.49.

Also making news: Nickel miner Mincor Resources Ltd (ASX:MCR) will reactivate its Miitel nickel mine in Western Australia due to a recovery in metals prices. The mine was closed in December 2008 due to low prices and a dismal outlook for demand.

ANZ Banking Group Ltd (ASX:ANZ) has received regulatory approval to open a branch in Chongqing, China.

Taking a look at some of the week's top stories:Industrial explosives maker Orica Ltd (ASX:ORI) reported a 75% drop in first half profit on Monday and announced it has bought out its joint venture partner in a Chinese mining business on Wednesday.

The Commonwealth Bank Ltd (ASX:CBA) was the first of the big four banks to raise its mortgage rates by 0.25% in line with the RBA’s decision to raise the official cash rate on Tuesday.

And National Australia Bank Ltd (ASX:NAB) posted a 21.4% drop in first-half net profit to just over $2 billion for the six months to March 31.

In the best and worst performers: All sectors finished the session in the red, but the sector with the smallest losses at close was the Materials index, down 57 points at 11.440. The worst performing sector was the Financials excluding the Real Estate Investment Trust index; down 187 points to 5,209.

In the S&P/ ASX200 Karoon Gas Australia was the best performer, shares rose 14.14% to $7.99. Meanwhile shares in Roc Oil Co. and Eldorado Gold closed stronger today.

The worst performing stock was Australian Infrastructure Fund, shares fell 7.55% to $1.775. Shares in Macmahon Holdings and Centennial Coal also closed weaker today.

And finally, the Aussie dollar is trading at 88.72 US cents - and is down almost 4 cents on the week. In commodities, gold is trading at $1,202.36 U.S an ounce and is up $24.11 on the week, and light crude is $0.10 higher at $77.21 U.S cents a barrel.


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