The Australian share market closed slightly lower, led down by the energy sector which slid 1 per cent on the back of some big stock falls, namely Woodside which fell by 46 cents. The news of the day came from the Reserve Bank which surprised no one with its decision to cut the key cash rate by a further 25 basis points to a record low 2.5 per cent, and NAB was the first of the big banks to respond, while a number of regional lenders have also reacted swiftly. The Aussie dollar jumped on the call, tipping $US0.8971, with some analysts tipping a decent bounce in the local currency based on speculation we have reached the bottom of the RBA’s rates cycle. FNN spoke to Tim Harcourt, the airport economist from the Australian School of Business at UNSW and got his view on the record rate cut.
Taking a look at today’s figures, the S&P/ASX 200 index closed 6 points down to finish at 5,106. The value of trades was $3.9 billion on volume of 703 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 ANZ Banking Group
(ASX:ANZ).
On the futures market the SPI is 2 points down.
Economic news
The Australian Bureau of Statistics says the nations trade surplus widened in June, albeit below expectations. Australia’s trade surplus expanded 19 per cent to $602 million in the month, beneath analyst expectations as high as $804 million.
Also from the ABS, the June quarter house price indexes for the eight capital cities are out, indicating a rise of 2.4 per cent. In the year to June the house price index rose 5.1 per cent.
ANZ’s job advertisements series for July is also out and they’ve fallen for the fifth straight month to be 19 per cent below levels from a year ago. The index declined by 1.1 per cent in the month, on the back of a 1.6 per cent fall in June.
Company news
National Australia Bank Limited
(ASX:NAB) was the first of the big four banks to respond the RBA rates call, opting to pass on the full 25 basis points and cutting its standard variable home loan rate to 5.88 per cent. ING Direct has also responded quickly, lowering its variable mortgage interest rates to 5.22 per cent as of Friday August 23. Shares in NAB closed 0.06 per cent down at $31.06.
Westpac Banking Corp
(ASX:WBC) will cut home loan rates by 28 basis points to 5.98 per cent. Westpac has had the highest advertised rates of the big four for several years, and says its move to surpass the RBA’s cut was designed to boost confidence against the backdrop of a housing recovery. Bank of Queensland Limited
(ASX:BOQ) also passed on the rate cut and lowered its standard variable rate to 6.01 per cent. In late trade, Commonwealth Bank of Australia
(ASX:CBA) also got in on the action, cutting its standard variable mortgage rates to 5.9 per cent. Shares in Westpac closed 0.41 per cent down at $31.24.
Downer EDI Limited
(ASX:DOW) lifted its full year net profit by 10.3 per cent to $215.4 million, however flagged more uncertainty for the year ahead, with fewer new major capital works in the resources sector.
Cochlear Limited
(ASX:COH) posted a net profit of $132.5 million, up 133 per cent increase on the previous year, and says it is confident its product pipeline will continue to drive growth.
Leighton Holdings Limited
(ASX:LEI) subsidiary Leighton Contractors has reached an agreement with Main Roads Western Australia on the price, scope and construction method for the $1 billion Gateway WA Perth airport and freight access project.
Iress Limited
(ASX:IRE) will acquire UK financial services company Avelo for $361.62 million, a transaction it says is consistent with its growth strategy.
Best and worst performers
The best performing sector was Real estate investment trusts adding 19 points to close at 1,027.
The worst performing sector was Energy, losing 123 points to close at 13,414 points.
The best performing stock in the S&PASX 200 was Atlas Iron Limited
(ASX:AGO), rising 5.36 per cent to close at $0.89. Shares in GPT Group
(ASX:GPT) and Independence Group NL
(ASX:IGO) also closed higher.
The worst performing stock was Resolute Mining Limited
(ASX:RSG), dropping 10.76 per cent to close at $0.70. Shares in Flight Centre Limited
(ASX:FLT) and Silver Lake Resources Limited
(ASX:SLR) also closed lower.
Commodities
Gold is trading at $US1,292 an ounce. Light crude is $0.02 down at $US106 a barrel.
The Australian dollar
The Australian dollar is buying $US0.8989.
