After Wall Street posted losses and concerns for Chinese metal demand permeated global markets, the Australian share market dived at open and is 1.25 per cent down at midday, with a soft GDP reading failing to boost sentiment. All the major sectors are trading down at this stage.
The S&P/ASX 200 index is 61 points down at 4,840. On the futures market the SPI is 56 points lower.
Economic news
Activity in the Australian services sector has hit a 13-month low and its second lowest-reading since the global financial crisis in May, according to the AiG-Commonwealth Bank Australian Performance of Services Index for May fell 3.5 points to 40.6, with a reading below 50 showing the sector is contracting. Despite recent interest rate cuts, consumer sentiment remains weak, with businesses continuing to lower prices to stimulate demand, with the average selling prices index hitting its lowest level since 2007.
The Australian economy expanded below expectations in the March quarter, according to the Australian Bureau of Statistics. Gross domestic product (GDP) in the March quarter grew a seasonally adjusted 0.6 per cent. For the 12 months to March, GDP grew at 2.5 per cent.
Company news
Billabong International Limited
(ASX:BBG) shares jumped almost 11 per cent in opening trade after monster losses yesterday following a month-long trading halt and issuing a profit downgrade. But most of the early gains have been wiped out as investors come to terms with the fact the embattled surfwear retailer has also failed to secure a suitor. Shares in Billabong are trading steady at $0.23.
Atlas Iron Limited
(ASX:AGO) has responded to media speculation surrounding the alleged provision of infrastructure services. The iron ore miner says it is in discussions with a range of existing and potential infrastructure providers, and is continuing to work with its partners to assess the viability of an independent port and railway in the Pilbara. However, Atlas says all such discussions remain, at this stage, incomplete. Shares in Atlas Iron are trading up 1.20 per cent at $0.84.
Best and worst performers All major sectors are down. The sector with the fewest losses is is Healthcare dropping 22 points to 12,634. Shares with the fewest losses are in Sonic Healthcare Limited
(ASX:SHL) have fallen 0.39 per cent and trading at $14.14. Shares in CSL Limited
(ASX:CSL) and Ramsay Health Care Limited
(ASX:RHC) are also lower at noon.
The worst performing sector is Financials excluding real estate investment trusts, shedding 103 points to 6,094. Shares in Macquarie Group Limited
(ASX:MQG) have fallen 2.92 per cent, trading at $40.90. Shares in AMP Limited
(ASX:AMP) and Westpac Banking Corp
(ASX:WBC) are also lower.
Gold and the dollar
Gold is trading at $US1,401 an ounce and the Australian dollar is buying $US0.962.
