The Australian share market finished 0.2 per cent stronger, with investors remaining optimistic that the US government shutdown will not cause serious damage to the economy. Utilities led the gains for the major sectors, while Materials stocks were the worst performers.
The S&P/ASX 200 index closed 9 points up to finish at 5,216. The value of trades was $3.5 billion on volume of 637 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited
(ASX:BHP), Rio Tinto Limited
(ASX:RIO) and Commonwealth Bank of Australia
(ASX:CBA).
On the futures market the SPI is 2 points up.
Economic news
The Australian Bureau of Statistics says building approvals fell above expectations in August, with the number of buildings approved falling by 4.7 per cent to 13,687, down from 14,304 in July. Economists had anticipated a 0.5 per cent decrease. Despite the fall, building approvals are now 7.7 per cent higher than the corresponding period last year.
Also from the ABS, Australia’s trade deficit widened to $815 million in August, against expectations of it narrowing to $400 million. Exports rose 3 per cent in the month, while imports went up by 1 per cent.
Company news
UGL Limited
(ASX:UGL) has extended the contract of its chief executive for another 13 months as it moves to split its engineering and property businesses. Richard Leupen had been due to step down in March 2014, however now will remain on board until April 2015. Chairman Trevor Rowe said the extra time would allow Mr Leupen to oversee the demerger of UGL’s property business DTZ from the company’s engineering business. Mr Leupen’s extended contract includes fixed remuneration of $2.08 million per year, plus a $1.5 million strategic incentive fee. Shares in UGL closed 3.26 per cent down at $8.00.
National Australia Bank Limited
(ASX:NAB) believes the RBA is unlikely to enact any further rate cuts until at least February. The bank says higher unemployment and downward pressure on inflation will be the triggers for further easing, but probably not until early next year. Shares in NAB closed 0.32 per cent up at $34.52. Looking at some more headlines:
Paladin Energy Limited
(ASX:PDN) jumped 10.42 per cent as the uranium explorer forecast significant cost reductions over the next two financial years, with cash cost cuts expected to total $US23 million.
Linc Energy Limited
(ASX:LNC) shares dropped 10.5 per cent after the oil and gas explorer announced its intention to seek shareholder approval to delist from the Australian Securities Exchange and request to list immediately on the Singapore Exchange.
Warrnambool Cheese & Butter Factory Co
(ASX:WCB) shares firmed after it forecast a lift in earnings for fiscal 2014 thanks to improved market conditions. WCB says it expects fiscal 2014 EBITDA to come in between $47 million and $52 million.
Rio Tinto’s Limited
(ASX:RIO) shares dropped 1.28 per cent despite the miners Oyu Tolgoi gold and copper mine potentially being closer to development, after the Mongolian Government said some of its concerns about the project have been resolved.
Best and worst performers
The best performing sector was Utilities adding 50 points to close at 5,517.
The worst performing sector was Materials, losing 58 points to close at 9,587.
The best performing stock in the S&PASX 200 was Horizon Oil Limited
(ASX:HZN), rising 11.11 per cent to close at $0.35. Shares in Paladin Energy Limited
(ASX:PDN) and BlueScope Steel Limited
(ASX:BSL) also closed higher.
The worst performing stock was Linc Energy Limited
(ASX:LNC), dropping 10.5 per cent to close at $1.26. Shares in Ausdrill Limited
(ASX:ASL) and Resolute Mining Limited
(ASX:RSG) also closed lower.
Commodities
Gold is trading at $US1,292 an ounce. Light crude is $0.29 down at $US102.04 a barrel.
The Australian dollar
The Australian dollar is buying $US0.9356.
