The Australian share market sank 0.9 per cent today, capping off a rough start to the first week of June. After shedding 9 per cent in May stocks continued their downwards trend and lost another 3.8 per cent this week. Investors stepped out of risk, with the miners hit the hardest, ahead of a crucial US economic indicator - America’s monthly jobs report due for release this evening. Consensus view expects the US economy added 100,000-150,000 jobs last month, which would be the weakest growth this year. Closer to home Australians now head into a long weekend public holiday and the ASX will resume trading on Tuesday.
Figures
The S&P/ASX 200 index shed 44 points today, extending the weekly decline of 189 points to finish the week at 4,738.
The value of trades was $4.8 billion on volume of 840 million shares at the close of trade.
The top three stocks by value were BHP Billiton Limited
(ASX:BHP), Telstra Corporation Limited
(ASX:TLS) and Westpac Banking Corporation
(ASX:WBC).
On the futures market the SPI is 43 points lower.
Wall Street
US indicies have all fallen over the four trading days this week: The Dow Jones Industrial Average has lost 284 points, the S&P 500 Index has lost 32 points, the Nasdaq has lost 67 points and the 100 Index has lost 62 points.
Economic news
Australia’s construction sector has now remained in contraction for three years. The Australian Industry Group and Housing Industry Association’s Performance of Construction Index (PCI) added 0.1 points to 35.3 in April, remaining under 50 which indicates construction activity is shrinking. AIG says "Successive cuts in interest rates by the Reserve Bank of Australia have been welcome but, so far, they appear only to have steadied the decline in building activity.”
Company news In the wake of falling commodity prices Australia’s miners are tightening their belts. Responding to the plunging gold price Newcrest Mining Limited
(ASX:NCM) has slashed jobs and spending, scrapped its final dividend and decided to close its Brisbane office. CEO Greg Robinson says the gold producing company has been forced to react to lower prices for its main product but its strategy remains on track. Newcrest Mining’s market value has more than halved over the past year – today falling to one of the worst performing stocks and losing 7.56 per cent to end the session at $12.35.
Lynas Corporation Limited
(ASX:LYC) says softer demand and weaker prices for its products have forced it to rein in costs and streamline operations. The rare earths producer will cut costs and reduce capacity at its Malaysian refinery to offset as subdued market. Though conceding, prices have fallen this year Lynas is hopeful signs of stabilisation are emerging in some categories. Shares in Lynas Corporation pulled back 1.9 per cent today, finishing the week at $0.52.
Shares in BHP Billiton Limited
(ASX:BHP) dropped 2 per cent despite the global miner spruiking its optimistic outlook on China’s appetite for commodities. New CEO Andrew Mackenzie says after meeting with the Chinese Premier he was extremely reassured about the demand for resources.
Shares in Santos Limited
(ASX:STO) closed 0.5 per cent lower, despite spending most of the day higher after the oil and gas producer revealed a gas discovery in the Browse Basin offshore Western Australia. The company has four exploration permits in the region and the discovery backs up the region’s potential as a possible production source.
Best and worst performers
The best performing sector was telco services adding 10 points to close at 1,595.
The worst performing sector was materials, losing 220 points to close at 8,945 points.
The best performing stock in the S&PASX 200 was Energy World Corporation Limited
(ASX:EWC), rising 7.5 per cent to close at $0.43. Shares in Virgin Australia Holdings Limited
(ASX:VAH) and Treasury Wine Estates Limited
(ASX:TWE) also closed higher.
The worst performing stock was Medusa Mining Limited
(ASX:MML), dropping 10.61 per cent to close at $2.36. Shares in Maverick Drilling and Exploration Limited
(ASX:MAD) and Newcrest Mining Limited
(ASX:NCM) also closed lower.
Commodities
Gold is trading at $US1,412 an ounce, down $4.50 over the week.
Light crude is $0.16 higher at $US94.92 a barrel.
The Australian dollar
The Australian dollar is buying 95.14 US cents, down $0.014 over the week.
