The Australian share market toppled off the days peaks in afternoon trade following unexpectedly weak June trade data out of China. The local market lost strong early momentum to close just 0.4 per cent higher, with some boisterous gains in health stocks working to gloss over largely uninspired performances among blue chips.
The S&P/ASX 200 index closed 20 points up to finish at 4,901. The value of trades was $4.2 billion on volume of 763 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) which saw some volume after announcing a $750 million debt issue.
On the futures market the SPI is 29 points higher.
Economic news
China's customs agency revealed imports and exports have unexpectedly declined in June, severely missing market expectations. Australia's largest trading partner posted a fall in exports of 3.1 per cent in June from a year earlier, the first decline since January 2012, while imports dropped 0.7 per cent, reinforcing signs of a economic slowdown in the second quarter.
The Westpac- Melbourne Institute’s index of consumer sentiment has come in flat in July, edging down 0.1 per cent to 102.21, from 102.2 in June. The index is holding steady in plus 100 positive territory, however has dropped considerably from a peak of 110.54 in March.
Company news
Mortgage lender Pepper Australia has launched a rival takeover offer for RHG Limited
(ASX:RHG), just two days after a bid from lender Resimac was board recommended. Pepper has made a cash offer of 46 cents per share, eclipsing the Resimac pitch by 1.9 cents. Under and implementation deed with Resimac, RHG must allow the opportunity for a counter-proposal. Shares in RHG responded warmly to the brewing tussle, closing 5.38 per cent up at $0.49.
Nufarm Limited
(ASX:NUF) Chairman Donald McGauchie says Australia neglected its farmers at a time when its Asian proximity provided a golden opportunity to become the food bowl for rapidly growing Asian food demand. Speaking at a American Chamber of Commerce in Australia lunch, Mr McGauchie said Australia is badly trailing the competition when it comes to feeding the region and is at risk of missing a once in a century opportunity due to a lack of skills, people, capital infrastructure and polices. Mr McGauche says the farming boom driven by the rise of Asia’s mega middle class begun last decade and Australia has missed the gun. Shares in Nufarm closed 1.99 per cent stronger at $4.62.
Macquarie Equities analysts have said Qantas Airways Limited
(ASX:QAN) and Virgin Australia Holdings Limited
(ASX:VAH) are set to be struck by a flow on of the slowdown in mining activity in Australia.
Virgin Australia Holdings Limited
(ASX:VAH) and AIR NZ
(ASX:AIZ) are expected to be permitted to continue their trans-Tasman alliance, after the ACCC announced it plans to grant conditional approval for the deal lasting three years. However the regulator says it is concerned the tie-up may impact competition on some routes including Christchurch to Melbourne and Wellington to Brisbane.
Air New Zealand Limited
(ASX:AIZ) says it believes capacity conditions are not necessary in the current market structure and will work with the competition watchdog to understand its rationale for requiring such conditions.
Westpac Banking Corp
(ASX:WBC) has launched a $750 million debt issue, pricing tier 2 capital securities at $100 apiece.
Best and worst performers of the day
The best performing sector was Healthcare adding 215 points to close at 13,628.
The worst performing sector was Real estate investment trusts, losing 11 points to close at 1,035.
The best performing stock in the S&PASX 200 was Bradken Limited
(ASX:BKN), rising 7.21 per cent to close at $4.76. Shares in Energy World Corporation Limited
(ASX:EWC) and Mount Gibson Iron Limited
(ASX:MGX) also closed higher.
The worst performing stock was Billabong International Limited
(ASX:BBG), dropping 10.42 per cent to close at $0.21. Shares in Fleetwood Corporation Limited
(ASX:FWD) and Discovery Metals Limited
(ASX:DML) also closed lower.
Commodities
Gold is trading at $US1,245 an ounce. Light crude is $0.82 up at $US104.35 a barrel.
The Australian dollar
The Australian dollar is buying $US0.9181.
