As the US government shutdown continue to send global markets down, the Australian share market opened lower and is trading flat at noon, as central banks, world leaders and company bosses the world over voice their concerns over the potentially catastrophic ramifications of political fighting in the US. Locally, Industrial stocks are helping keep the market within reach of positive territory at midday.
The S&P/ASX 200 index is 11 points down at 5,139. On the futures market the SPI is 12 points lower.
Economic news
The Westpac-Melbourne Institute’s Index of Consumer Sentiment fell by 2.1 per cent to 108.3 in October, backtracking from 110.6 in September. Westpac chief economist Bill Evans says the result is solid despite the decline, with the index remaining 9.2 per cent above its level a year ago.
Australia's economic growth prospects have been downgraded by the International Monetary Fund (IMF) due to the nation's vulnerability to slower Chinese demand for commodity exports. In its World Economic Outlook, the IMF forecast Australian growth of 2.5 per cent in calendar 2013, down from a 3 per cent forecast in April. For 2014, the IMF sees Australian growth at 2.8 per cent, rather than 3.3 per cent. Treasurer Joe Hockey says the report confirms there are downside risks to the Australian budget that will need to be managed by the coalition government.
Company news
Virgin Australia Holdings Limited
(ASX:VAH) has inked a $60 million, five year telco services agreement with Singapore Telecommunications Limited (CHESS)
(ASX:SGT) owned Optus. Under the agreement, Optus will deliver domestic and international telecommunications and managed services over its managed data network for the airline. Shares in Virgin Australia are trading steady at $0.42.
AMP Limited
(ASX:AMP) has announced that current Grocon CFO Gordon Lefevre will replace Colin Storrie midway through the first half of calendar 2014. CEO Craig Dunn says Mr Lefevre will be pivotal in capitalising on the success of the merger of AMP, having previously held a senior finance role at NAB Limited
(ASX:NAB). Shares in AMP are trading down 0.22 per cent at $4.57.
Best and worst performers The best performing sector is Industrials gaining 9 points to 3,888. Shares in Transfield Services Limited
(ASX:TSE) have risen 4.31 per cent and trading at $1.21. Shares in NRW Holdings Limited
(ASX:NWH) and Boart Longyear Limited
(ASX:BLY) are also stronger.
The worst performing sector is Healthcare, falling 123 points to 13,599. Shares in Sigma Pharmaceutical Limited
(ASX:SIP) have fallen 2.36 per cent, trading at $0.52. Shares in Sirtex Medical Limited
(ASX:SRX) and Mesoblast Limited
(ASX:MSB) are also lower.
Gold and the dollar
Gold is trading at $US1,319 an ounce and the Australian dollar is buying $US0.9426.
