Lifted by positive leads the Australian share market rose at the open, slipped into the red, and is steady at noon. Investors remain cautious as hopes for Europe’s debt crisis have been muted by a series of downgraded forecasts for European, Chinese and domestic economic growth. Most sectors are higher, with the financials dragging in negative territory.
The S&P/ASX200 index has added 7 points and is 4,066. On the futures market the SPI is 3 points lower.
Economic news
Ratings agency Fitch has confirmed America’s AAA credit rating, lowered its US credit outlook and upgraded Australia’s foreign currency issue default rating. The US outlook has been cut from stable to negative, noting the nation’s debt levels and economic outlook. Australia's foreign currency issue default rating has been upgraded to AAA from AA+, noting our “high value-added economy, strong political, civil and social institutions and flexible policy framework”.
The Federal Government has lowered its forecast for Australian growth to 3.25 per cent in fiscal 2011 and fiscal 2012. The figure compares with May’s estimate of 4 per cent growth in fiscal 2011 and 3.75 per cent growth in fiscal 2012.
The latest forecast from the Organisation for Economic Co-operation and Development (OECD) says it expects Australia’s economic growth to be 4 per cent in 2012 before easing to 3.2 per cent in 2013.
Company news
UGL Limited (ASX:UGL) has won $200 million in new and extended resources contracts. Among the awards is a contract with CP Mining at the Sino Steel plant in Western Australia’s Pilbara region and a maintenance contract at BHP Billiton Limited’s (ASX:BHP) Olympic Dam project in South Australia. Managing director, Richard Leupen, says the outlook for the resources business remains healthy and UGL has an estimated $11 billion pipeline of tendering opportunities. Shares in UGL have firmed 0.16 per cent and are trading at $12.40.
Decmil Group Limited (ASX:DCG) has inked a deal to buy a 50 per cent interest in a build-own-operate accommodation village in Gladstone, Queensland. The civil engineering and construction company says it will undertake an $85 million capital raising to fund the continued construction of up to 2,265 rooms. The total value of the project is expected to be more than $150 million. Shares in Decmil Group have been placed in a trading halt and last traded at $2.14.
Best and worst performers
The best performing sector is Real Estate Investment Trusts, adding 9 points to 788. Shares in Westfield Retail Trust have gained 2.1 per cent and trading at $2.43. Shares in Westfield Group and Goodman Group are also higher.
The worst performing sector is Financials Excluding Real Estate Investment Trusts, losing 7 points to 4,382. Shares in FKP Property Group have slipped 1.01 per cent and trading at $0.49. Shares in National Australia Bank and Commonwealth Bank are also lower.
New Zealand
The NZSX50 is 28 points higher. Taking a look at the top four stocks by turnover, Fletcher Building is at the top of the list with stock easing 0.17 per cent to $5.86 followed by Chorus, Telecom Corporation of New Zealand and Westpac.
Gold and the dollar
Gold is trading at $US1,711 an ounce.
The Australian dollar is buying 98.83 US cents.
