After rising more than 5 per cent last month the Australian share market saw a shaky start to August. Stocks rose following encouraging US growth figures and hopes America’s economic stimulus will continue.
A mixed bag of Chinese manufacturing data wiped out the morning gains and pushed the market into negative territory. Investors clung to the sidelines in the afternoon following talk of an impending bank levy.
Despite the speculation hitting the financial sector hard, the broader bourse finished almost unchanged supported by strength in the materials, industrials and energy sectors.
Figures
The S&P/ASX 200 index ended 10 points higher at 5,062.
The value of trades was $4.9 billion on volume of 820 million shares at the close of trade.
On the futures market the SPI is 3 points lower.
Chinese economic news
The official read on China’s manufacturing activity has surprised by lifting above the key 50 threshold to move into expansion territory. 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.
A privately compiled gauge has produced a read in contraction territory. The HSBC and Markit China manufacturing PMI came in-line with expectations at 47.7 but represented an 11-month low.
Australian economic news
The official weighted median measure of consumer prices has been revised down. The Australian Bureau of Statistics has adjusted the read to show a rise of 0.6 per cent in the second quarter, indicating there could be more scope to cut they key cash rate next week.
Manufacturing activity remains weak. The Australian Industry Group’s Performance of Manufacturing Index fell to 42 in July, indicating the sector is shrinking.
Australian housing values have improved for the second straight month. According to RP Data-Rismark's home value index capital city dwelling values rose 1.6 per cent in July.
New home sales across Australia have also risen. The Housing Industry of Australia has reported new home sales rose 3.4 per cent in June in the same period detached house sales rose 7.3 per cent, but multi-unit sales fell 17.5 per cent.
The pace of online sales growth has declined for the second straight month. National Australia Bank Limited
(ASX:NAB) has shown online spending rose 14 per cent to $13.9 billion in the year to June after slowing to a pace of 18 per cent growth in the year to May.
Company news
The financial sector took a hit amid speculation a new federal levy could bite into bank savings. According to media reports the Labor government is considering introducing the levy to safe-guard the Australian economy from future economic shocks in case bailouts are required.
National Australia Bank Limited’s
(ASX:NAB) chief refused to comment on the reports when addressing a business lunch in Sydney today. However, CEO Cameron Clyne did call on the government to take on more debt to fund infrastructure projects. Shares in National Australia Bank fell 1.6 per cent to end the session at $30.73.
Shares in Suncorp Group Limited
(ASX:SUN) sank after the lender and insurer revealed its annual profit could fall by as much as 34 per cent. Investors piled out despite the company also hiking its full-year dividend after finalising the sale of its non-core asset portfolio to Goldman Sachs. Shares in Suncorp Group dropped 2.89 per cent to end the session at $12.45.
Shares in ANZ Banking Group
(ASX:ANZ) dropped 1.24 per cent after a report emerged 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.
Shares in Perpetual Limited
(ASX:PPT) ended steady after the fund manager’s proposed takeover of Trust Company Limited
(ASX:TRU) hit a hurdle. Australia’s competition regulator has warned the transaction could raise competition concerns in the financial services sector.
Shares in Amcor Limited
(ASX:AMC) gained 1.42 per cent after the global packaging giant revealed it will spin off its Australian canning, bottling and carton business into a separate entity to list on the Australian Securities Exchange (ASX).
Shares in FAR Limited
(ASX:FAR) climbed 23.3 per cent after the oil and gas explorer inked a partnership with US giant ConocoPhillips to drill for oil offshore Senegal.
Best and worst performers
The best performing sector was consumer discretionary adding 22 points to close at 1,682.
The worst performing sector was financials excluding real estate investment trusts, losing 60 points to close at 6,512 points.
The best performing stock in the S&P/ASX 200 was Ausdrill Limited
(ASX:ASL), rising 6.48 per cent to close at $1.15. Shares in Linc Energy Limited
(ASX:LNC) and Mount Gibson Iron Limited
(ASX:MGX) also closed higher.
The worst performing stock was Alacer Gold Corppration
(ASX:AQG), dropping 8.9 per cent to close at $2.56. Shares in Silver Lake Resources Limited
(ASX:SLR) and Horizon Oil Limited
(ASX:HZN) also closed lower.
Commodities
Gold is trading at $US1,320 an ounce.
Light crude is $0.60 up at $US105.63 a barrel.
The Australian dollar
The Australian dollar is buying 89.7 US cents.
