The Australian share market dropped over the day but stayed steady over a week marked by significant offshore events. As US president Obama scored a second term China’s leadership transition began. As the European Central Bank (ECB) warned to expect weak growth in the region next year the Reserve Bank of Australia (RBA) trimmed its outlook for domestic growth after keeping rates on hold at 3.25 per cent earlier in the week. Today, attention turned to the looming US fiscal cliff, pushing stocks into the red with the financials weighing as majors National Australia Bank Limited
(ASX:NAB) and Westpac Banking Corporation
(ASX:WBC) traded ex-dividend.
Figures
The S&P/ASX 200 index fell 22 points today to finish the week 2 points higher at 4,462. On the futures market the SPI is now flat.
Wall Street: US stocks have dropped over the week with one trading day remaining: The Dow Jones Industrial Average has lost 282 points, the S&P 500 Index has lost 37 points, the Nasdaq has lost 87 points and the 100 Index has lost 84 points.
Economic news
The Reserve Bank of Australia has trimmed its outlook for Australia’s growth next year citing softer commodity prices, reduced mining investment and the government’s pledge to return to surplus. The Central Bank previously forecast GDP growth of 3 per cent but has lowered the forecast to just under 2.75 per cent in 2013.
China's inflation rate unexpectedly fell last month to the lowest read since January 2010. The National Bureau of Statistics has reported the China's consumer price index grew 1.7 per cent year-on-year in October compared to a rise of 1.9 per cent the month before. The Bureau also reported China's producer price index dipped to 2.8 per cent in October compared to a fall of 3.5 per cent the month before.
Company news Shares in Origin Energy Limited
(ASX:ORG) sank after investors responded to the energy retailer’s shock earnings warning last night and consequent debt concerns. Origin has blamed regulatory and pricing moves for cutting its full year earnings growth to between zero and five per cent in fiscal 2013. CEO Grant King says it has been a difficult year to forecast with earnings risks greater on the downside than on the upside. Shares in Origin Energy sank 5.07 per cent today to end the week at $10.42.
After yesterday scoring the green light to start operations Lynas Corporation Limited
(ASX:LYC) has today revealed plans to raise up to $200 million to ramp up production at its $800 million rare earths refinery in Malaysia. The equity raising will involve a fully underwritten institutional placement to raise up to $150 million and a share purchase plan to raise up to $50 million. The rare earths developer says the funds will give it positive cash flows to meet capital expenditure requirements and provide a significant cash buffer. Shares in Lynas Corporation last traded at $0.81.
National Australia Bank Limited
(ASX:NAB) will pay a minimum of $85 million to settle a shareholder class action relating to significant losses incurred from toxic mortgage assets in the US purchased in 2008. The bank has not admitted liability and says the settlement of the class action is a purely commercial decision.
Shares in SP AusNet
(ASX:SPN) firmed after the energy provider posted a 16 per cent increased in its first half profit. SP AusNet generated a net profit of $169 millionon the back of stronger earnings across all its businesses, higher electricity prices and increased gas volumes.
Best and worst performers
The best performing sector was health care adding 88 points to close at 10,750.
The worst performing sector was financials excluding real estate investment trusts, losing 47 points to close at 5,245 points.
The best performing stock in the S&PASX 200 was Integra Mining Limited
(ASX:IGR), rising 6.08 per cent to close at $0.55. Shares in Silver Lake Resources Limited
(ASX:SLR) and Myer Holdings Limited
(ASX:MYR) also closed higher.
The worst performing stock was Emeco Holdings Limited
(ASX:EHL), dropping 16.94 per cent to close at $0.52. Shares in Origin Energy Limited
(ASX:ORG) and Iluka Resources Limited
(ASX:ILU) also closed lower.
Commodities
Gold is trading at $US1,735 an ounce, up $58.44 over the week.
Light crude is $0.65 higher at $US85.09 a barrel.
The Australian dollar
The Australian dollar is buying $1.042, up $0.0085 over the week.
