Market Wrap: Bank buys lead ASX fightback

Market Reports

The Australian share market has fought back from its mid-session doldrums to close 0.2 per cent lower, with banking stocks leading the recovery as investors snap up some dipping bargains. Among the sectors, REIT saw a 1.73 per cent gain on the day, while consumer discretionary and financial stocks also finished on or slightly above the line.  
 
The S&P/ASX 200 index closed 12 points down to finish at 4,814. The value of trades was $4.3 billion on volume of 809 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited (ASX:BHP), Commonwealth Bank of Australia (ASX:CBA) and Westpac Banking Corporation (ASX:WBC)
 
On the futures market the SPI is 4 points down.
 
Economic news

The Reserve Bank of Australia has indicated it is prepared to cut the cash rate further even though the Australian dollar is falling. In its June board meeting minutes, the central bank says the high Australian dollar has been a drag on much of the non-mining sectors of the Australian economy. According to the RBA: 
 
‘‘The exchange rate remained at a high level considering the decline in export prices over the past year and a half. It was possible that the exchange rate would depreciate further over time, as the terms of trade declined, which would help foster a rebalancing of growth in the economy.’’
 
Company news 
 
Lynas Corporation Limited (ASX:LYC) has dropped defamation action against Malaysian green group Save Malaysia Stop Lynas, ardent opponents of the rare earths producers now realised plans for a processing plant. Chief executive Eric Noyrez says solicitors have been instructed to discontinue legal action against the activist group, as there is no value in continuing disputes with members of the local community. Shares in Lynas closed 2.27 per cent down at $0.43. 
 
Lend Lease Group (ASX:LLC) has tried to reassure investors its earnings will grow this financial year despite a restructure to deal with a slowing construction market. Following yesterday’s share price fall, Lend Lease today said its overall earnings in the year to June 30 would meet analyst expectations. Shares in Lend Lease Group closed 2.31 per cent down at $8.45. 
 
Clothing retailer Pacific Brands Limited (ASX:PBG) has flagged possible international expansion as part of a five-year plan to offset falling earnings in a bitterly arduous domestic retail market, utilising the popularity of its Bonds portfolio to target new markets in the United Kingdom, United States, China and other parts of Asia.
 
Elders Limited (ASX:ELD) shares plummeted more than 22 per cent today after the rural services company confirmed it has rejected a takeover bid for its rural services business and has entered into exclusive negotiations over its Futuris automotive division.
 
Newcrest Mining Limited (ASX:NCM) may face further scrutiny from ASIC over allegations it tipped analysts to a writedown weeks before an official announcement
 
Pharmaxis Limited (ASX:PXS) has presented new analyses on the longer term benefits of its drug Bronchitol on cystic fibrosis sufferers at the European Cystic Fibrosis Society conference in Portugal. The company says it has completed pricing and reimbursement negotiations in Germany and the UK and is engaged with other countries in the EU, with announcements expected in the months ahead.
 
Best and worst performers

The best performing sector was Real estate investment trusts adding 18 points to close at 1,034.
The worst performing sector was Industrials, losing 39 points to close at 3,530.
 
The best performing stock in the S&PASX 200 was Coalspur Mines Limited (ASX:CPL), rising 10.17 per cent to close at $0.33. Shares in Boart Longyear Limited (ASX:BLY) and Drillsearch Energy Limited (ASX:DLS) also closed higher.
 
The worst performing stock was Billabong International Limited (ASX:BBG), dropping 11.11 per cent to close at $0.16. Shares in CuDeco Limited (ASX:CDU) and St. Barbara Limited (ASX:SBM) also closed lower. 
 
Commodities

Gold is trading at $US1,379 an ounce. Light crude is $0.09 up at $US97.86 a barrel.

The Australian dollar

The Australian dollar is buying $US0.9511.