Market Wrap: Aus shares down 0.9% at close

Market Reports

Following mixed leads the Australian share market opened lower and slid throughout the morning on concerns about the falling iron ore price, trading in a narrow rande for the rest of the day before closing down just under 1 per cent. 

The S&P/ASX 200 index closed 41 points down to finish at 4,316. On the futures market, the SPI is currently 47 points down.

Economic news

The ABS today reported a rise in capital expenditure for the June quarter and revealed the likelihood of Australia’s mining boom continuing. Figures indicated that 63 cents is invested in all other industries for every dollar invested in mining. The mining sector also recorded greater capital spending in 2011 and 2012 than the rest of the sectors combined. The ABS also reported a 10.6 per cent drop in building approvals from this time last year.

Company news

Carsales.com Limited (ASX:CRZ) has announced a deal with the Telstra corporation to operate the trading post classifieds website. The Trading Post website will be relaunched using Carsales quicksales.com.au online capabilities under the terms of the deal. Carsales CEO Greg Roebuck anticipates the arrangement to offer an Australian-owned alternative to the eBay-owned Gumtree classifieds website. The arrangement will be funded through operating cash flow and is expected to be earnings per share accretive in the coming financial year. Shares in Carsales.com closed 0.69 per cent up at $7.30.

Rio Tinto Limited (ASX:RIO) shares fell below $50 for the first time since 2009 today on the back of slumping iron ore prices. The iron producer is suffering along with other producers as the iron ore price has fallen while Chinese steel mills continue to deplete stockpiles. Fellow miners Atlas Iron and Fortescue Metals Group were also impacted today, both sinking to three year share lows. Iron Ore prices today fell to $US90.30 and the market is not expected to recover until mine supply begins to run out in the next few months. Shares in Rio Tinto closed 3.78 per cent down at $48.63.

Prime Media Group Limited (ASX:PRT) has posted a 2 per cent improvement in its full year net profit of $28 million, underpinned by growth in Prime’s television audience share and wins in multiple ratings markets.

Perpetual Limited (ASX:PPT) suffered a significant decline in its full year net profit, sliding 57 per cent to $26.7 million, impacted by costs borne from its transformation initiatives as well as cost reduction efforts.

Boart Longyear Limited (ASX:BLY) has reported a 32 per cent increase on its half year net profit of $US98 million, however has revised its full year 2012 guidance in light of difficult trading conditions.

Lend Lease Group (ASX:LLC) has posted a 2% rise in its full year net profit of $501 million, impacted by $5.8 million worth of property investment write downs.

Best and worst performers 

The best performing sector was Health Care adding 134 points to close at 10,239. The worst performing sector was Materials, losing 270 points and closing at 9,304.

The best performing stock in the S&PASX 200 was SP AusNet (ASX:SPN), rising 3.92 per cent to close at $1.06. Shares in Toll Holdings Limited (ASX:TOL) and Qube Logistics Holdings Limited (ASX:QUB) also finished higher.

The worst performing stock was Boart Longyear Limited (ASX:BLY), despite its profit result, it dropped 36.97 per cent to close at $1.50. Shares in Imdex Limited (ASX:IMD) and Ausdrill Limited (ASX:ASL) were also lower at close.

Commodities

Gold is trading at $US1,661 an ounce. Light crude is $0.32 down at $US95.17 a barrel.

The Australian dollar

The Australian dollar is buying $US1.033.