Following positive offshore leads the Australian share market dipped into the red at open and is steady at noon, after Gross Domestic Product data showed the nation’s economy shrank in line with forecasts, contracting 1.2 per cent in the first three months of this year.
The S&P/ASX200 index is 1 point lower at 4,707 at noon. On the futures market the SPI is 2 lower.
Economic news: The Australian Bureau of Statistics has reported that first quarter GDP shrank 1.2 per cent in period that saw natural disasters hit economic growth. It was the first fall since December 2008 and came following an upwardly revised 0.8 per cent rise in the December quarter 2010. Also, the Australian Industry Group/PriceWaterhouse Coopers Australian Performance of Manufacturing Index has shown the third consecutive months of contraction. The index fell 0.7 points to 47.7 in May, pulled down by weak domestic demand and a strong Australian dollar.
Company news: Tabcorp Holdings Ltd (ASX:TAH) demerger looks set to get the go-ahead, with proxy votes from shareholders overwhelmingly backing the proposal to split the gaming companies casinos business from its wagering, gaming and keno businesses. At Tabcorp’s general meeting today 97.76 per cent of proxy votes supported the demerger with the final tally due later today. The demerger would see Wagering, Gaming and Keno businesses continue as Tabcorp Holdings and the casinos business known as Echo Entertainment Group Ltd. Shares in Tabcorp Holdings are down 0.26 per cent at noon, trading at $7.79.
Responding to media speculation, Cash Converters International Ltd (ASX:CCV) has denied that potential reforms to interest rates charged by payday lenders pose an imminent threat to the business. Cash Converters says if the reforms do have the potential for an adverse outcome, the company will take steps to minimise or offset any adverse effect on earnings. Since the article was published the second-hand goods retailer’s share price has fallen more than 12 per cent this week, prompting a price query from the Australian Securities Exchange. While today shares in Cash Converters have risen 3.65 per cent at noon and are trading at $0.71.
To the best and worst performers: The best performing sector is Telco Services, adding 7 points to 1,042. Shares in Singtel have firmed 0.83 per cent and trading at $2.44. Shares in Telstra is higher while Macquarie Telecom is flat at noon. The worst performing sector is Financials Excluding Real Estate Investment Trusts falling 30 points to 4,999. Shares in National Australia Bank have dropped 1.25 per cent and trading at $26.15. Shares in Westpac and Bank of Queensland are also lower at noon.
To New Zealand: The NZSX50 is 6 point lower. Taking a look at the top four stocks by turnover, Telecom Corporation of New Zealand is at the top of the list with stock steady at $2.42 followed by Fletcher Building, Guinness Peat Group and ANZ.
Gold and the dollar: Gold is trading at $US1,531 an ounce and the Aussie dollar is buying $US1.0727 cents.
