The Australian share market tumbled more than 2 per cent today as investors fretted over the US Federal Reserve’s plans to back out of its economic stimulus program and slowing Chinese growth. Local stocks followed Wall Street and sank steeply at open and losses accelerated after a report revealed a drop-off in Chinese factory activity. The mining sector fared the worst, losing 3 per cent by close, and the banking sector fell 2.6 per cent - with only technology and health sectors bucking the downward trend.
Figures
The S&P/ASX 200 index sank 103 points to end the session at 4,758.
The value of trades was $7 billion on volume of 1.1 billion shares at the close of trade.
The top three stocks by value were Commonwealth Bank of Australia
(ASX:CBA), BHP Billiton Limited
(ASX:BHP) and Westpac Banking Corporation
(ASX:WBC).
On the futures market the SPI is 126 points lower.
Economic news
A read on manufacturing activity in the world’s second largest economy has slid to a nine-month low. HSBC’s China 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 - taken from the value of credit and debit card transactions - has risen by the largest monthly amount in more than five years. 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.
Company news Fortescue Metals Group Limited
(ASX:FMG) has warned it will not reach its iron ore shipment forecasts this financial year while spruiking continued strong demand for its main product. The Pilbara focussed iron ore miner has blamed wet weather for impacting shipments and also revealed the proposed sale of its infrastructure assets has been delayed. Shares in Fortescue Metals Group retreated 6.55 per cent, ending the session at $3.14.
Emeco Holdings Limited
(ASX:EHL) ended as the worst performer after cutting its annual net profit guidance in the wake of project delays and a dispute in Indonesia. The mining services provider says it is closely managing costs and controlling discretionary maintenance programs, but warned challenging conditions are likely to continue. Shares in Emeco Holdings plunged 20 per cent, ending the session at $0.30.
Shares in ANZ Banking Group
(ASX:ANZ) ended 2.47 per cent down after reports emerged the bank is considering sending up to 600 Australian jobs offshore.
Shares in Macquarie Group Limited
(ASX:MQG) finished 2.14 per cent lower after the investment bank boosted its interest in Mark Bouris’ financial services company Yellow Brick Road Holdings Limited
(ASX:YBR) to 10.5 per cent.
Shares in New Newscorp
(ASX:NNC) soared 15.12 per cent on their second day of trading on the Australian Securities Exchange after the publishing company enjoyed a better than expected debut on Wall Street overnight.
Shares in Boom Logistics Limited
(ASX:BOL) sank 18.18 per cent after the logistics provider revealed it has lost a contract with BHP Billiton Limited
(ASX:BHP) for work in West Australia’s Port Headland.
Best and worst performers
The best performing sector was health care, avoiding negative territory and adding 56 points to close at 12,619.
The worst performing sector was materials, losing 260 points to close at 8,639 points.
The best performing stock in the S&PASX 200 was New Newscorp
(ASX:NNC), rising 15.12 per cent to close at $16.75. Shares in Coalspur Mines Limited
(ASX:CPL) and Imdex Limited
(ASX:IMD) also closed higher.
The worst performing stock was Emeco Holdings Limited
(ASX:EHL), dropping 20 per cent to close at $0.30. Shares in Perseus Mining Limited
(ASX:PRU) and OceanaGold Corporation
(ASX:OGC) also closed lower.
Commodities
Gold is trading at $US1,343 an ounce.
Light crude is $1.71 down at $US96.77 a barrel.
The Australian dollar
The Australian dollar is buying 92.49 US cents.
