The Australian share market declined steadily today, led down by the banking sector and following the RBA’s decision to keep interest rates on hold.
Today, the S&P/ASX 200 index closed 26 points down to finish at 4,304. On the futures market, the SPI is currently 24 points lower.
Economic news
The board of the Reserve Bank has left the official cash rate steady at 3.5 per cent for a third straight month and in line with forecasts.
Australia’s current account deficit narrowed to $11.8 billion in the June quarter down from over $12 billion in the March quarter according to the Australian Bureau of Statistics.
Company news In a class action against National Australia Bank Limited
(ASX:NAB) relating to heavy losses sustained by the bank in the US subprime mortgage market, legal council for shareholders have requested the banking regulator Australian Prudential Regulation Authority (APRA) provide documents that could be highly relevant to an upcoming trial scheduled for later this year. The preliminary hearing into disclosure of documents continues. Shares in NAB closed 0.79 per cent down at $25.10.
Falling commodity prices has forced Fortescue Metals Group Limited’s
(ASX:FMG) hand as it announced it will slash costs and delay developments on key projects. Immediate staff losses and reduced operating costs are expected to save about $US300 million. CEO Nev Power says Fortescue is confident in the underlying fundamentals of the Chinese economy and believes iron ore prices will rebound in the medium term. Shares in Fortescue closed 4.21 per cent down at $3.41.
DuluxGroup Limited
(ASX:DLX) has again extended the offer period for its planned hostile takeover of Alesco Corporation Limited
(ASX:ALS) to the October 2 this year. DuluxGroup’s interest in Alesco increased to 44.3 per cent at the end of last week.
Downer EDI Limited
(ASX:DOW) has won a $70 million two year contract from Meridian Energy Australia to work on the Mt Mercer Wind Farm in Victoria.
Copper producer Sandfire Resources NL
(ASX:SFR) has formed a JV with Breakaway Resources Limited
(ASX:BRW) and bought a 6.3 per cent stake in the junior explorer.
Leighton Holdings Limited
(ASX:LEI) has scored a $US68 million contract to construct reservoirs in Qatar. The contract is the fourth awarded to the property developer’s Middle Eastern division.
Now, to the best and worst performers of the day: The best performing sector was real estate investment trusts adding 2 points to close at 926.The worst performing sector was Financials excluding REIT’s, losing 66 points to close at 5,094.
The best performing stock in the S&PASX 200 was Virgin Australia Holdings Limited
(ASX:VAH), rising 5.88 per cent to close at $0.45. Shares in St Barbara and OceanaGold Corp also closed higher.
The worst performing stock was Boart Longyear Limited
(ASX:BLY) dropping 10.88 per cent to close at $1.27 Shares in NRW Holdings and Gindalbie Metals also closed lower.
Commodities
Gold is trading at $US1,696 an ounce.
Light crude is $1.79 up at $US97.15 a barrel.
The Australian dollar
The Australian dollar lifted following the RBA’s decision to keep rates on hold and is buying $US1.028.
