Iron ore fall caps gains: Aus shares flat at noon

Market Reports

by Jessica Amir

Following record yet flat gains on Wall Street, coupled with a dip in the iron ore price, the Australian share market sank at the open and has remained underwater in the first two hours of trade.

Because of the dip in iron ore, big miners are leading a suite of decliners today, with the likes of BHP (ASX:BHP) South32 (ASX:S32) and Rio (ASX:RIO) all losing over 1.4 per cent.

It is also important to note, South 32 and about another 20 companies are going ex-dividend today, which is putting further pressure on markets.

Meantime, after the oil price steamed up about 2.2 per cent overnight, the energy space is leading the advancers.

The S&P/ASX 200 index is 1 point down or 0.02 per cent at 5,743.

On the futures market the SPI is 4 points lower.

Asian markets

Japan’s Nikkei has added 0.14 per cent, Hong Kong’s Hang Seng has lost 0.15 per cent and the Shanghai Composite has gained 0.07 per cent.

Local economic news 

The ABS announced the unemployment rate remained steady at 5.6 per cent as expected. The Australian economy saw a 27,100 rise in the employment numbers, above the 15,000 jobs predicted to be added according to consensus. In more good news for our nation, the participation rate rose 0.1 points to 65.2 per cent in August.

Company news

Metro Mining Limited (ASX:MMI) has awarded its Bauxite Hills mining contract to a Queensland mining service company, SAB Mining. SAB is already on the Bauxite Hills site, located 100 kms north of Weipa in the sunshine state (QLD), undertaking civil works. The contract has a two-year term, with a possible two-year extension. Operations are on track with production to start early April 2018. Shares in Metro Mining Limited (ASX:MMI) are trading 5.56 per cent higher $0.19.

Pancontinential Oil & Gas (ASX:PCL) has inked a deal with a strategic partner for its Namibian subsidiary and received an injection of $10 million. The junior oil and gas company holds a 30 per cent stake in the highly prospected licence PEL 37 which is offshore Namibia. Pancontinential settled the transaction with Africa Energy with Pancon to retain 66.67 per cent in the subsidiary, while African Energy will snap up a 33.33 per cent stake in it. Shares in Pancontinential Oil & Gas (ASX:PCL) are trading 33 per cent higher at 0.4 cents.

The best and worst performers

The best performing sector is Energy, gaining 0.8 per cent to 9,213. Shares in Santos (ASX:STO) have risen 1.15 per cent and trading at $3.95. Shares in Caltex Australia (ASX:CTX) and Woodside Petroleum (ASX:WPL) are also stronger. 

The worst performing sector is Materials, falling 0.96 per cent to 10,619. Shares in Independence Group Nl (ASX:IGO) have fallen 4.77 per cent, trading at $3.70. Shares in Syrah Resources (ASX:SYR) and Western Areas (ASX:WSA) are also lower. 

Commodities and the dollar

Gold is trading at $US1,321 an ounce and one Australian dollar is buying 80.11 US cents
 

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