After jumping more than one per cent by midday the Australian share market pared gains to close just 0.3 per cent firmer. Consumer Discretionary stocks gained after better than expected retail sales data, but it was not enough to offset losses in the Financials.
The S&P/ASX200 Index closed 11 points higher at 4,308. On the futures market, the SPI is up 16 points.
Economic news
Manufacturing activity hit a two year low with the index sinking to a read of 43.3 in August, that was according to the Australian Industry Group and PricewaterhouseCoopers.
The Australian Bureau of Statistics reported higher than expected retail sales and CAPEX figures. Retail sales rose 0.5 per cent in July and new private capital expenditure gained 4.9 per cent in the June quarter.
Company news
Rio Tinto Limited (ASX:RIO) has forecast iron ore demand to soar. Speaking at the Africa Down Under mining conference in Perth today, managing director of the global miners iron ore expansion projects, David Joyce, said production will need to reach at least 100 million tonnes per annum over the next eight years in order to satisfy demand. Mr Joyce also said Rio is on track to expand its Pilbara iron ore output capacity from 225 million tonnes per annum to 333 million tonnes per annum. Shares in Rio Tinto gained 0.77 per cent today, closing at $73.08.
Leighton Holdings Limited (ASX:LEI) says it plans to vigorously defend claims that it misled shareholders by not properly disclosing its financial performance. The statement was issued hours after reports emerged that Leighton shareholders are planning to hit Leighton with a $400 million class action alleging the property group breached the continuous-disclosure rules by not detailing cost blowouts and project delays. Shares in Leighton Holdings closed 1.33 per cent higher today at $20.55.
Telstra Corporation Limited’s (ASX:TLS) planned structural separation for the national broadband network received a thumbs up today. An independent expert says the telco will be $4.7 billion better off if the separation proceeds and has recommended shareholders vote in favour of the plan.
Shares in Qantas Airways Limited (ASX:QAN) lifted after Standard and Poor's upgraded its outlook to stable, from negative. The ratings agency says it expects the airline’s overall performance to gradual improve as a result of its new international strategy.
Shares in CSR Limited (ASX:CSR) fell after the building materials, aluminium and glass manufacturer said it would restructure its struggling Viridian glass business. CSR also forecast 10 per cent net profit growth for the first half of the current financial year.
Shares in Arafura Resources Limited (ASX:ARU) rose after the rare earths producer revealed it is in advanced talks to pre-sell more of its product to global players. Managing Director, Steve Ward, told Reuters that Arafura is in a number of discussions in Asia, Europe and the US.
Best and worst performers
Most sectors closed on positive ground: The best performing sector was Telco Services, rising 9 points to close at 1,050. The worst performing sector was Health Care, falling 39 points to close at 7,751 points. The best performing stock in the S&P/ASX200 was St Barbara, lifting 3.86 per cent to close at $2.15. Shares in Aristocrat Leisure and Caltex Australia finished the day stronger. The worst performing stock was Tatts Group, losing 5.17 per cent to close at $2.20, the stock going ex-dividend today. CSR also closed lower, as did and IOOF Holdings, the stock also going ex-dividend today.
Commodities
Gold is trading at $US1,818 an ounce. Light crude is up $0.20 cents at $US89.01 a barrel.
