Midday: ASX sinks on US stimulus & China fears

Market Reports

Signs the US Federal Reserve will wind back its economic stimulus program sooner than hoped has sent the Australian share market and dollar down south. After Wall Street’s major indices each lost more than 1 per cent overnight local stocks shed more than 1 per cent at open and the Aussie dollar tumbled below 93 US cents to a 33-month low. All major sectors are trading in the red with the miners dragging the bourse down following disappointing manufacturing data from China.
 
The S&P/ASX 200 index has plunged 102 points to 4,759. On the futures market the SPI is 78 points down. 
 
Economic news

The latest read on China’s manufacturing activity has come in softer than expected. HSBC’s flash purchasing managers index dropped to 48.3 in June, down from 49.2 last month and down from an expected read of 49.1. 

A measure of spending has jumped by the largest monthly amount in more than five years. The gauge is taken from the value of credit and debit card transactions and the read is a positive reflection on demand from Australian consumers last month. Commonwealth Bank of Australia’s (ASX:CBA) indicator of business sales gained 5.2 in May after falling per cent 0.1 per cent the month before. The indicator came in at a 10.3 per cent pace in May from a 5.9 per cent pace the month before. 

Company news

Shares in ANZ Banking Group (ASX:ANZ) are trading 2.26 per cent down after responding to union claims it plans to axe up to 600 jobs from its Victorian call centres. A spokesperson from the bank has brushed off the claims, stating no decisions have been made and it will not speculate on future decisions.

Shares in Linc Energy Limited (ASX:LNC) have fallen 5.06 per cent after the oil and gas producer inked a deal to evaluate underground coal gasification to gas to liquids opportunities in north eastern Russia. 
 
Shares in Coalspur Mines Limited (ASX:CPL) have jumped 14.93 per cent after naming Forge Group Limited’s (ASX:FGE) takeover target Taggart Global as preferred contractor for a $US221 million contract to work on Coalspur’s Vista Coal Project in Canada.  
 
Shares in Greencross Limited (ASX:GXL) have dropped 1.88 per cent after the veterinary services provider purchased its first pet crematorium for $1.45 million. 
 
Best and worst performers

The only sector trading in positive territory is health care, adding 86 points to 12,648. Shares in Cochlear Limited (ASX:COH) have risen 0.28 per cent and trading at $60.68. Shares in Sigma Pharmaceutical Limited (ASX:SIP) are steady while shares in Ansell Limited (ASX:ANN) are lower. 
 
The worst performing sector is materials, dropping 281 points to 8,618. Shares in PanAust Limited (ASX:PNA) have fallen 8.26 per cent, trading at $2.06. Shares in Fortescue Metals Group Limited (ASX:FMG) and Sandfire Resources NL (ASX:SFR) are also lower. 
 
Gold and the dollar

Gold is trading at $US1,343 an ounce.
The Australian dollar is buying 92.58 US cents.

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