Aussie shares have closed at their lowest level in nine months as investors flee from risky assets amid ongoing uncertainty surrounding European markets and the proposed resource profits tax.
The declines were led by the banking sector, with Westpac one of the biggest losers. The S&P/ASX 200 Index closed the day 84 points lower at 4,387. While on the futures market, the SPI200’s down 104 points.
To company news around this afternoon: Iron ore miner Fortescue Metals Group Ltd (ASX:FMG) has put $15 billion in new projects on hold as a result of the federal government’s plan to introduce a 40% tax on mining profits. Chief executive Andrew Forrest says the miner will temporarily shelve its $US9 billion Solomon Hub and $US6 billion Western hub projects as it reviews the impact of the proposed Resource Super Profits Tax. Mr Forrest says the company has received approaches from overseas interests offering to buy the projects and may have to accept them if the tax is implemented in July 2012 as it would be unable to continue to fund them. Fortescue joins BHP Billiton and Rio Tinto in putting projects on hold as a result of the new tax. Shares in Fortescue Metals Group are 4.68% lower at $3.87.
Shares in electrical goods retailer Clive Peeters Ltd’s (ASX:CPR) were suspended from trading this afternoon as the company announced it has been placed in voluntary administration. Just weeks after warning of poor sales, Clive Peeters says it has appointed McGrathNicol as voluntary administrators to determine whether the underlying business can be preserved via a deed of company arrangement and/or sale of the business. A first meeting of creditors is to be held no later than Friday, May 28. On May 4, the company warned that it expected to post a loss of about $4.5 million for the March quarter. Shares in Clive Peeters last traded at $0.15.
Also making news: Diversified services company UGL Ltd (ASX:UGL) has been awarded an $88 million contract for the TransGrid Beaconsfield West Substation Upgrade Project in Sydney.
Port and rail operator Asciano Group Ltd (ASX:AIO) has urged regulators to intervene in the $6 billion sale of a coal-rail network in northern Queensland – a move that could delay the country's biggest IPO this year. Retailer David Jones Ltd (ASX:DJS) has posted growth of 1.4% in sales for the third quarter and reaffirmed its earnings guidance of between 5 and 10% growth for the second half of fiscal 2010 and for fiscal 2011.
And 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.
In the best and worst performers: One of the only sectors in the black at close was the Telco Services index, up 3 points at 1,030. The worst performing sector was the Financials excluding the Real Estate Investment Trust index, finishing 137 points lower at 5,037.
The best performing stock in the S&P/ ASX200 was Karoon Gas Australia, shares rose 5.87% to $8.12, while shares in Whitehaven Coal and Australian Agricultural Company also closed higher.
The worst performing stock was Gunns, shares lost 8.99% to $0.405. Shares in Murchison Metals and Roc Oil Company also closed weaker.
In commodities, gold is trading at $1,212.10 U.S an ounce and light crude is down $1.11 to $68.30 U.S a barrel.
