Following strong offshore leads the Australian share market opened higher but quickly retreated into negative territory and is 0.2 per cent down at noon, with property stocks leading losses at this stage and the dollar reacting to an unexpected drop in consumer sentiment in May.
The S&P/ASX 200 index is 13 points down at 5,167. On the futures market the SPI is 20 points lower.
Economic news
The Westpac-Melbourne Institute index of consumer sentiment has fallen 7 per cent to 97.6 in May, its lowest level in 10 months. The second consecutive monthly fall comes in response to the federal budget, with the Reserve Bank’s recent record rate cut failing to spur sentiment as was largely expected.
The Australian dollar fell below 98 cents on the news and is currently sitting at $US0.9796.
Company news
Newcrest Mining Limited
(ASX:NCM) has suffered a significant blow this morning, with a NSW court voiding an exploration license covering 70 per cent of its wholly owned exploration area in NSW. The court decision relates to a renewal application for the license in question, and falls in favour of junior explorer Gold and Copper Resources, a former potential joint venture partner that has accused Newcrest of confidentiality breaches and falsified information in its application. The exploration area encompasses Newcrest’s Cadia Valley operations, in which it has invested $2 billion in development, representing a savage blow to Australia’s largest gold miner. Newcrest shares are tumbling on the news, currently trading down 1.76 per cent at $15.33.
Seven West Media Limited
(ASX:SWM) have taken a slide in early trade after private equity firm Kohlberg Kravis Roberts offloaded its 12 per cent, $260 million stake in the company. The sale came after Seven named Tim Worner to take the reins as CEO, replacing Don Voelte as of July. Shares in Seven West are trading down 8.77 per cent at $2.08.
Best and worst performers The best performing sector is Materials gaining 91 points to 9,595. Shares in Independence Group
(ASX:IGO) have risen 5.33 per cent and trading at 3.36. Shares in Fortescue Metals Group Limited
(ASX:FMG) and Rio Tinto Limited
(ASX:RIO) are also stronger.
The worst performing sector is Real estate investment trusts, falling 18 points to 1,118. Shares in Stockland
(ASX:SGP) have fallen 3.02 per cent, trading at $3.86. Shares in Dexus Property Group
(ASX:DXS) and Investa Office Fund
(ASX:IOF) are also lower.
Gold
Gold is currently trading at $US1,375 an ounce.
