Despite a soft finish on Wall Street the Australian share market started the first day of August 0.4 per cent higher but has since given up the gains. Local stocks were given a boost after the US Federal Reserve left its bond buying economic stimulus program unchanged on the same day the economy posted upbeat growth figures. The mixed messages pushed the Aussie dollar to a three-year low below 90 US cents. The local bourse has stayed down after the release of two Chinese manufacturing reports with conflicting indicators.
After briefly dipping into negative territory the S&P/ASX 200 index is currently sitting 4 points higher at 5,056. On the futures market the SPI is 5 points higher.
Chinese economic news
Manufacturing activity in China has come in better than expected and rebounded over the key 50 threshold separating expansion from contraction. The National Bureau of Statistics and China Federation of Logistics and Purchasing reported a read of 50.3 in July, defying expectations for a read near 49.
Following the official read, the HSBC and Markit China manufacturing PMI has met expectations with as read of 47.7. The privately compiled gauge hit an 11-month low, falling from June's final reading 48.2.
Australian economic news
Manufacturing activity in Australia continues to remain weak. The Australian Industry Group’s Performance of Manufacturing Index fell 7.6 points to 42 in July, staying below 50 which indicates the sector is shrinking.
Australian housing values rose last month - boosted by better conditions in Sydney, Perth and Melbourne. RP Data-Rismark's home value index showed capital city dwelling values increased 1.6 per cent in July, after rising 1.9 per cent the month before. Values are now 6.5 per cent higher since May 2012.
Company news
Shares in ANZ Banking Group
(ASX:ANZ) have dipped 1.75 per cent amid reports the Asia-focused bank is gearing up to launch its first gold vault in Singapore to capitalise on the country’s strategic link between the world’s biggest gold producers – Australia and China.
Shares in Transurban Group
(ASX:TCL) have risen 1.77 per cent after tripling its annual net profit on the back of increased traffic on its local roads. The toll road operator has also flagged growth ahead and higher dividends.
Shares in Suncorp Group Limited
(ASX:SUN) have fallen 3.9 per cent after releasing a financial update. The insurance company has hiked its full-year dividend to 75 cents, which includes a special dividend after finalising the sale of its non-core asset portfolio to Goldman Sachs.
Shares in Elders Limited
(ASX:ELD) have jumped 8.86 per cent after the debt-laden takeover target inked a $69 million deal to offload its automotive components supplier business to US private equity firm Clearlake Capital Group.
Best and worst performers
The best performing sector is energy gaining 197 points to 13,449. Shares in Linc Energy Limited
(ASX:LNC) have risen 3.7 per cent and trading at $1.68. Shares in Aurora Oil & Gas Limited
(ASX:AUT) and Aquila Resources Limited
(ASX:AQA) are also stronger.
The worst performing sector is financials excluding real estate investment trusts, falling 104 points to 6,468. Shares in Suncorp Group Limited
(ASX:SUN) have fallen 3.9 per cent, trading at $12.32. Shares in Platinum Asset Management Limited
(ASX:PTM) and National Australian Bank Limited
(ASX:NAB) are also lower.
Gold and the dollar
Gold is trading at $US1,327 an ounce.
The Australian dollar is buying 89.8 US cents.
