Following a negative lead from Wall St overnight, the local share market is sharply lower at midday. A surprise move by Germany to ban naked short selling in the country’s top banks has unnerved investors causing them to flee riskier assets. Following their US peers into the red, the news sent local banks stocks down, with all four major banks trading lower at noon.
The S&P/ASX200 index is 70 points lower at 4,401 and on the futures market, the SPI200’s down 83.
In economic news: The Westpac/Melbourne Institute consumer sentiment index fell 7% in May to a read of 108. Interest rate rises and turmoil in global financial markets putting pressure on households.
In company news: Goodman Group (ASX:GMG) has signed a memorandum of understanding with the Langfang Municipal Government to develop a premier business and logistics hub in China. Goodman will be co-ordinator and master planner for the project, expected to take seven years, and will take a fee for service role. The company says it expects to generate fee income over the life of the project and will also consider making further investments for itself and its investment partners in the development and logistics and business park product on the site on a case by case basis. Shares in Goodman Group lost 3.94% to $0.61.
Rural services company AWB Ltd (ASX:AWB) has reported a net loss of $64.8 million for the six months to March 31, 2010. The result includes two major significant items, one is the settlement of the Watson shareholder class action for $39.5 million before tax. And the second is the loss on sale and restructuring costs associated with the sale of the Landmark Financial Services loan and deposit books of $65.4 million before tax. Not including the significant items AWB’s profit came to $32.8 million for the year. Despite this loss the company says its forecast for full year profit before tax for continuing businesses of between $85 million and $110 million remains unchanged. Shares in AWB declined 2% to $0.98.
Turning now to indices: Among a sea of red, one of the only sector’s in the black at midday is the Telco Services index, up 6 points at 1,033. Shares in Singapore Telecommunications are up 1.65% at $2.46. Shares in Hutchison Telecommunications and Telstra are also higher at noon.
The worst performing sector is the Energy index, down 303 points to 14,169. Shares in Bow Energy are down 6.8% to $1.165, while shares in Riversdale Mining and Aquila Resources are also lower.
Looking to New Zealand and the NZSX50 is down 23 points. Taking a look at the top 4 stocks by turnover: Heading the list is Telecom of New Zealand with stock down 0.97% at $2.05 followed by; Fletcher Building, Sky City Entertainment Group and Kiwi Income Property Trust.
To gold and the dollar: Gold is trading at US$1,215.50 an ounce and the Aussie dollar is trading at 85.5 US cents.
