The Local share market is deep in the red at midday after a sharp decline in US stocks overnight, investors jittery on concern for the global economy and stability of Europe’s banks.
The miners like BHP and Rio Tinto are leading the declines with uncertainty hanging over the proposed mining tax and the outcome of negotiations between the mining industry and the federal government.
The S&P/ASX200 index is 71 points weaker at 4,275 and on the futures market, the SPI200’s down 75.
In economic news: The Housing Industry Association says new home sales fell 6.4% in May after increasing 6.2% in April.
According to data released by the ABS, job vacancies in Australia fell 2.8% to 164,600 in the quarter to May.
And the RBA reports that private sector credit rose 0.5% in May. Economists expected a rise of 0.3%.
In company news: Engineering and construction company Downer EDI (ASX:DOW) has sold its remaining 49% stake in MB Century Drilling to Mohamed Al Barwani Holding Company LLC. CEO Geoff Knox says the initial 51% sale of MB Century was sold to MB Holding in 2007, along with a call option for the remaining 49%. Downer says the related transactions, including repayment of shareholder loans, results in a cash flow of around $88 million and following the previously disclosed impairment charge of $10 million, results in a pre-tax gain of $5 million. The announcement comes after Downer yesterday was forced to defend claims it stopped payments to ensure it achieved cash flow targets in its yearly accounts. Shares in Downer EDI fell 2.14% to $3.66.
Online travel agent Webjet Ltd (ASX:WEB) has entered into a 50% joint venture with Westminster Travel in an effort to expand its operations into Asia. Managing director David Clarke says the company believes that Asia represents a significant international growth region. The company says operations under the Webjet brand will commence later this year initially in Hong Kong and Singapore. Westminster Travel will provide local management and multilingual customer service facilities for Webjet in these areas. Shares in Webjet declined 1.31% to $1.89.
Turning now to market indices: All sectors are in the red at midday, however the sector with the smallest loss is the Utilities index, down 23 points to 3,987. Shares in Viridis Clean Energy Group are 2.17% higher at $0.047. Shares in Envestra and SP AusNet are also higher at noon.
The sector with the biggest loss at midday is the Materials index, down 256 points to 11,350. Shares in Iron Ore Holdings dropped 5.86% to $1.365, while shares in Incitec Pivot and Sims Metal Management are also trading lower at noon.
Looking to New Zealand and the NZSX50 is 33 points lower. Taking a look at the top 4 stocks by turnover: Topping the list is Telecom of New Zealand with stock down 1.59% at $1.86 followed by; Fletcher Building, Westpac, and Ryman Healthcare.
To gold and the dollar: Gold is trading at US$1,243.45 an ounce and the Aussie dollar is trading at 84.98 US cents.
