After yesterday’s pleasing close, and despite positive leads from the US this morning, the Australian sharemarket closed weaker today by 0.39 per cent, at the end of a non-eventful day of flat trading. The S&P/ASX200 Index closed 18 points lower at 4,567. On the futures market, the SPI is down 20 points.
Economic news
The Reserve Bank of Australia’s governor Glenn Stevens told the economic society of Australia today that the nation’s two-speed economy will get worse before it gets better, which means RBA will continue to raise interest rates. He also said the mining boom has pushed up the current high dollar, resulted in low unemployment, and generated higher tax receipts. And although the dollar is a challenge for the economy, it’s given Australian consumers a new level of purchasing power.
Data from the ABS released today shows that housing starts rose 3.1 per cent in the March quarter. Total starts rose to 39,578 in the three months to March 31, on a seasonally-adjusted basis. On an annual basis, starts were down 12.9 per cent compared to the same time in 2010.
Company news
Conquest Mining Limited (ASX:CQT) and Catalpa Resources Ltd (ASX:CAH) have reportedly agreed on plans to merge, and then buy an additional asset off a third party. Media reports this afternoon say the companies are expected to make an announcement about the merger to the ASX this evening, which would make their combined market cap $566 million. Shares in Conquest Mining Limited (Public, ASX:CQT) were down by 4.44 per cent at the end of the day, to $0.43.
Centro Properties Group (ASX:CNP) is being sued by investors over its $9.4 billion sale of its US mall portfolio to private equity group, Blackstone.
Smartec Capital investors have applied for a ruling by the federal court to determine whether the sale had to be approved by shareholders.
Shares in Centro Properties Group (ASX:CNP) were flat at the end of the day, closing at $0.049.
Shares in QBE Insurance Ltd (ASX:QBE) dropped about 4 per cent today in light of the company warning its insurance profit margins would be lower this year.Yesterday the company said its first-half profit will rise by as much as 60 per cent after its investment performance improved significantly from the previous year, which was a result well below market expectations.
The founder of Westfield Group (ASX:WDC), Frank Lowy, has been hospitalised with an inflamed bile duct. The company says he’s expected to make a full recovery.
Rio Tinto Ltd (ASX:RIO) is accelerating its iron ore expansion program in the Pilbara. The miner will spend $US350 million of funding for early works and procurement.
And Qantas Airways Ltd (ASX:QAN) says it will cut growth in its capacity and take delivery of fewer aircraft in response to a weak domestic market.
Stocks and sectors
In the best and worst performers: The best performing sector was Real Estate Investment Trusts, adding 5 points to close at 862. The worst performing sector was Health care, losing 104 points to close at 8,337.
The best performing stock in the S&P/ASX200 was St Barbara (ASX:SBM). Shares rose 7.44 per cent to close at $1.95. Shares in Energy Resources of Australia Ltd (ASX:ERA) and Charter Hall Group (ASX:CHC) also closed higher today.
The worst performing stock was Gunns (ASX:GNS) falling 6.78 per cent to close at $0.275. Shares in Transpacific Industries Group Ltd (ASX:TPI) and Carnarvon (ASX:CVN) also closed lower today.
Commodities
Gold is trading at $US1,524 an ounce and Light crude is down $0.42 at $US98.95 a barrel.
