Lifted by encouraging leads the Australian share market opened higher but slipped, after Westpac Banking Corporation (ASX:WBC) said it expects weaker growth for the Australian economy and ahead of the outcome of the US Federal Reserve’s meeting. Local shares are steady at noon with strength among the health and retail stocks failing to offset weakness among the financials.
The S&P/ASX200 index is 2 points lower at 4,038. On the futures market the SPI is 3 points higher.
Economic news
Westpac and the Melbourne Institute’s Leading Index, that indicates the likely pace of economic activity three to nine months into the future, has come in at its long term average of 3.1 per cent. The annualised rate of the coincident index, indicating current activity, came in at 0.2 per cent, under the long-term term trend of 2.8 per cent. Westpac chief economist Bill Evans says the latest results affirm the bank’s confidence that the next rate cut will come in December.
Company news
Shares in Lynas Corporation Limited (ASX:LYC) have slumped in early trade after a JP Morgan analyst downgraded fellow rare earths producer, US listed Molycorp Inc (NYSE:MCP), citing rare earths pricing and demand concerns. The comments from mining analyst Michael Gambardella sent Molycorp tumbling more than 20 per cent. In a note to clients Mr Gambardella said the prices for rare earths have fallen and forecast demand outside of China is down this year. Shares in fellow local rare earths producers, Alkane Resources Limited (ASX:ALK) and Arafura Resources Limited (ASX:ARU), have also taken a hit today. Shares in Lynas Corporation have slumped to the worst performer of the top 200, down 13.7 per cent at $1.26.
Mixed full year results from the retailers have pushed the whole sector higher at noon. Shares in outdoor clothing and equipment retailer Kathmandu Holdings Limited (ASX:KMD) have slipped after almost tripling its net profit to $32 million. Shares in department store retailer David Jones Limited (ASX:DJS) have risen after posting a 1.5 per cent fall in net profit. Harvey Norman Holdings Limited (ASX:HVN) and JB Hi-Fi Limited are also stronger (ASX:JBH), just behind DJs gaining 3.33 per cent at noon and trading at $2.79.
Best and worst performers
The sectors are mixed at noon: The best performing sector is Health Care, rising 140 points to 7,442. Shares in CSL have advanced 2.98 per cent and trading at $28.01. Shares in Sonic HealthCare and Mesoblast are also higher.
The worst performing sector is Financials Excluding Real Estate Investment Trusts, falling 35 points to 4,202. Shares in Commonwealth Bank of Australia have dropped 1.46 per cent and trading at $43.72. Shares in National Australia Bank and Westpac are also lower.
New Zealand
The NZSX50 has added 7 points. Taking a look at the top four stocks by turnover, Westpac is at the top of the list with stock down 1.46 per cent at $23.65 followed by Telecom Corporation of New Zealand, Fletcher Building and AMP New Zealand Office.
Gold and the dollar
Gold is trading at $US1,800 an ounce. The Australian dollar is buying $US1.0267 cents.
