The Australian share market closed 1.5 per cent stronger, shrugging off some weak business conditions to comfortably erase yesterday’s losses. Financials posted a strong rally to gain 1.9 per cent, while Materials and Energy stocks also performed well. The telco’s were the only sector to finish in the red.
The S&P/ASX 200 index closed 72 points up to finish at 4,882. The value of trades was $4.3 billion on volume of 704 million 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 64 points up.
Economic news
Business conditions have fallen to a four-year low in June as trading, profits and employment conditions weakened. The NAB monthly business survey showed a ‘worrying picture for the Australian economy,’ with conditions slipping from minus 4 in May to minus 8 last month. The bank says that a falling Australian dollar appears to have done little to lift spirits, with concerns about global economic conditions likely to be weighing.
Company news
Northern Star Resources Limited
(ASX:NST) has announced plans to cut its exploration and development budget, including a move to indefinitely delay its Ashburton gold project in Western Australia. The delay comes in response to the recent downturn in the gold price, with Northern Star saying it will continue to meet minimum expenditure commitments to retain ownership of what it believes will be a valuable asset in the future. Shares in Northern Star closed 2.5 per cent up at $0.61.
Telstra Corporation Limited
(ASX:TLS) will cut up to 170 jobs as it shifts part of its back office operations to India, amid sweeping changes to the telco’s operations. National Applications Service chief David Burns says the company’s current business model was inadequate and the offshoring needs to occur to promote domestic and international growth. Shares in Telstra closed 0.63 per cent down at $4.76.
Ramelius Resources Limited
(ASX:RMS) shares leapt 23.81 per cent after the gold miner reported record June quarter production at its Mt Magnet mine in Western Australia.
ANZ Banking Group
(ASX:ANZ) shares firmed 1.88 per cent as the bank increased its capital notes raising to $1 billion, after launching it at $750 million just a week ago.
Yancoal Australia Limited
(ASX:YAL) shares rose 4.29 per cent after parent company Yanzhou Coal Mining made enquiries about taking the vehicle private.
Alumina Limited
(ASX:AWC) firmed 3 per cent despite its US producing partner Alcoa posting a second quarter loss of $131 million.
Best and worst performers
The best performing sector was Financials excluding real estate investment trusts adding 116 points to close at 6,263.
The worst performing sector was Telco services, the only major sector to finish in the red, losing 9 points to close at 1,648.
The best performing stock in the S&PASX 200 was Discovery Metals Limited
(ASX:DML), rising 19.35 per cent to close at $0.18. Shares in Buru Energy Limited
(ASX:BRU) and Silver Lake Resources Limited
(ASX:SLR) also closed higher.
The worst performing stock was Billabong International Limited
(ASX:BBG), dropping 15.79 per cent to close at $0.24. Shares in Medusa Mining Limited
(ASX:MML) and Mineral Deposits Limited
(ASX:MDL) also closed lower.
Commodities
Gold is trading at $US1,256 an ounce. Light crude is $0.16 up at $US103.30 a barrel.
The Australian dollar
The Australian dollar is buying $US0.9145.
