After negative offshore leads and the Federal Government’s carbon tax announcement, the Australian share market widened losses throughout the day to close more than 1.5 per cent down. Investors grappled with the fallout from weak US jobs data, historically high Chinese inflation figures and the impact of a national carbon pricing scheme.
The S&P/ASX200 Index fell 72 points to close at 4,582. On the futures market, the SPI is down 80 points.
Economic news
The Australian Bureau of Statistics has reported the number of home loans approved in May increased 4.4 per cent, to a seasonally adjusted 49,437. Total housing finance by value rose 2.9 per cent to $20.497 billion in May.
The Housing Industry Association has warned the cost of the carbon price threatens to trickle down to home buyers, increasing the cost of building homes and threatening jobs in Australia’s home building sector, as the industry gears up to compete with imports from non-carbon taxing countries.
Company news
The head of gas-fired and renewable energy producer Origin Energy Limited (ASX:ORG) has backed the carbon price of $23 per tonne. Managing director Grant King says the price is sufficient to result in real progress for reducing carbon emissions. Mr King also assured consumers that the tax will not hinder their ability to receive a continued reliable supply of electricity. Shares in Origin Energy fell 2.19 per cent, closing at $15.16.
Oil refiner Caltex Australia Limited (ASX:CTX) says it will fight for 100 per cent compensation from the carbon tax so that it can remain competitive internationally. Under the scheme Caltex will receive transitional assistance for 94.5 per cent of the carbon price. However, Caltex says it needs full compensation to keep on a level playing field with overseas competitors who do not bear carbon costs. Shares in Caltex Australia ended the day 0.87 per cent lower at $11.42.
Shares in Carbon Conscious Limited (ASX:CCF) jumped more than 9 per cent as investors put their weight behind the company that describes itself as Australia's leading carbon offset supplier through planting Australian native trees in degraded farmland.
Shares in Ceramic Fuel Cells Limited (ASX:CFU) surged more than 15 per cent with investors clearly backing the companies solid oxide fuel cell technology, designed to provide energy efficient and low-emission electricity from natural gas and renewable fuels.
Shares in Rio Tinto Limited (ASX:RIO) slipped after the global mining giant slammed the carbon tax, claiming it will hinder investment and jobs growth and do nothing to reduce carbon emissions.
Shares in steelmakers such as BlueScope Steel Limited (ASX:BSL) and OneSteel Limited (ASX:OST) fell heavily, even despite a $300 million assistance package designed to compensate the companies from the carbon tax.
Best and worst performers
Most sectors closed in the red. The only sector to finish in positive territory was Telco Services, adding 6 points to close at 1,035. The worst performing sector was Financials Excluding Real Estate Investment Trusts, losing 102 points to close at 4,869. The best performing stock in the S&P/ASX200 was Energy World Corporation shares advanced 8.65 per cent to close at $0.565. Shares in Infigen Energy and Southern Cross Media Group also gained today. The worst performing stock was BlueScope, falling 6.67 per cent to close at $1.26. Shares in Gunns and Intrepid Mines also closed lower today.
Commodities
Gold is trading at $US1,546 an ounce. Light crude is down $0.60 cents at $US95.60 a barrel.
