Market Wrap: ASX sheds 3.8% in week of horror

Market Reports

The Australian share market extended a week of horror losses with a 1.6 per cent drop today, pushing the bourse below 5,000. Sinking into the red for the fourth straight session local stocks posted a weekly fall of 3.8 per cent. It was one of the worst weeks in 18 months as fears of a global economic slowdown forced investors to flee risk and head to safety. 
 
The traditionally safe-haven gold sector welcomed some gains, supported by Newcrest Mining Limited (ASX:NCM). The rest of the blue-chips ended lower, with losses from the banks and Telstra Corporation Limited (ASX:TLS) hitting the hardest. The Australian dollar did not escape the weakness, remaining at one-year lows against the US dollar.     
 
Figures

S&P/ASX 200 index plunged 79 points today, extending the weekly loss of 197 points to finish the week at 4,984. 

The value of trades was $6.2 billion on volume of 1.1 billion shares at the close of trade.

The top three stocks by value were Westpac Banking Corporation (ASX:WBC), Commonwealth Bank of Australia (ASX:CBA) and National Australia Bank Limited (ASX:NAB)

On the futures market the SPI is 97 points lower.

Wall Street

Following a four-week rally US stocks have put in mixed trading performances over the four trading days this week: The Dow Jones Industrial Average has added 61 points, the S&P 500 Index has added 0.04 points, the Nasdaq has lost 6 points and the 100 Index has lost 8 points. 
 
Economic news this week

China’s factory activity shrunk for the first time in seven months in April 2012. The HSBC flash China manufacturing PMI came in at 46.6, with a read below 50 indicating contraction in the manufacturing sector.

Australia’s commodities forecaster predicted investment into major resources and energy projects could fall by more than two-thirds in the next five years. The Bureau of Resources & Energy Economics reported a record $268 billion is committed to new developments but with almost $150 billion delayed or cancelled over the past year, investment is reaching its peak. 

Company news

Shares in Echo Entertainment Group Limited (ASX:EGP) hit a record low after James Packer’s Crown Limited (ASX:CWN) offloaded its 10 per cent stake in the gaming company. Mr Packer’s decision to sell Echo shows his confidence Crown’s proposed $1 billion development of a six-star hotel and casino at Barangaroo in Sydney will be approved. While Echo Entertainment Group slumped to the day’s worst performer, Crown lost 1.76 per cent to end the week at $12.83.  
 
Australian Agricultural Company Limited (ASX:AAC) has revealed its second major Queensland divestment this week after booking a quarterly net loss of $46.5 million on the back of lower cattle prices. Australia’s biggest beef cattle producer today announced it will sell its Brighton Downs Station for almost $12 million and announced earlier this week it will sell subdivisions of its Goonoo Aggregation for $23 million. Shares in Australian Agricultural Company lost 1.82 per cent today, ending the week at $1.08. 

Shares in Oil Search Limited (ASX:OSH) bucked a negative trend in the energy sector and added 0.87 per cent to hit a new high amid takeover speculation. The oil and gas producer has been at the centre of reports suggesting it is poised to attract a bid ahead of its PNG LNG project starting up in 2014. 

Shares in Service Stream Limited (ASX:SSM) extended yesterday’s 25 per cent fall and lost another 9.09 per cent today to hit an all time low. Investors continued to leave the telco service provider following news it had breached its banking covenants due lower than expected earnings. 

Best and worst performers

Gold was the only bright spot, with all other major sectors retreating into the red by close.

The sector with the smallest losses was materials, losing 96 points to close at 9,385.
The worst performing sector was consumer discretionary, losing 38 points to close at 1,594 points.
 
Gold stocks rose to the session’s best performers, recovering slightly from a recent battering: Silver Lake Resources Limited (ASX:SLR) gained 11.68 per cent to close at $0.77. Shares in Kingsgate Consolidated Limited (ASX:KCN) and Regis Resources Limited (ASX:RRL) also closed higher.
 
The worst performing stock was Echo Entertainment Group Limited (ASX:EGP), dropping 11.92 per cent to close at $3.03. Shares in Fleetwood Corporation Limited (ASX:FWD) and iiNet Limited (ASX:IIN) also closed lower. 

IPOs

Classic Minerals Limited NPV (ASX:CLZ) started trading today. The base metals explorer listed with an issue price of $0.20, opened at $0.15 and dropped more than 10 per cent over the session to close at $0.13.    

Commodities

Gold is trading at $US1,389 an ounce, up $5.80 over the week.
Light crude is $0.34 lower at $US93.91 a barrel.

The Australian dollar

The Australian dollar is buying 96.77 US cents, down $0.007 over the week. 

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