After gaining almost 4 per cent over October the Australian share market slipped into the red on the first day of November and is trading steady at noon. Local stocks followed Wall Street lower as speculation continued to swirl about the US Federal Reserve’s taper timeline.
While the sectors are trading mixed gold miners are struggling after the price of the precious metal shed about $25 overnight. Investors are also holding some fire ahead of an official read on Chinese manufacturing expected this afternoon.
Figures
The S&P/ASX 200 index has lost 5 points to sit at 5,421 at noon. On the futures market the SPI is 10 points lower.
Economic news
A read on Australia’s manufacturing activity expanded to a three-year high last month. The Australian Industry Group's Performance of Manufacturing Index gained 1.5 points to 53.2 in October, with a read above 50 indicating expansion. Australian Industry Group's chief says, "While there are, certainly, encouraging signs it is too early to call a recovery with a good share of the gains representing a catch-up following a very slow mid-year period".
The value of homes remained on the rise last month in Australia's eight capital cities. RP Data-Rismark’s home value index shows home values gained 1.3 per cent in October 2013 and are now 12.6 per cent higher than October 2012. The property consultant says although values are broadly rising the strength in the market is being fuelled by Sydney where home values increased by 2.4 per cent last month.
Company news
Shares in Bega Cheese Limited
(ASX:BGA) jumped to a record high after New Zealand dairy giant Fonterra Shareholders’ Fund
(ASX:FSF) acquired a 6 per cent stake in the Australian company. Fonterra has made a $46 million investment in Bega through purchasing 9.3 million shares at $4.95 and at the same time increasing its chances of getting a slice of Warrnambool Cheese & Butter Factory Co.
(ASX:WCB). Bega is one of three bidders pursuing Warrnambool and its takeover offer was given a boost yesterday with the Australian Competition and Consumer Commission (ACCC) claiming it will not oppose the bid. Shares in Bega Cheese have surged 10.43 per cent and are trading at $4.87.
PanAust Limited
(ASX:PNA) has increased its explore to one of the world's largest undeveloped copper and gold deposits through buying a project from Swiss giant Glencore Xstrata. The Australian mining company will pay $75 million for an 80 per cent stake in the Frieda River Project in Papua New Guinea. The deal will see PanAust team up with ASX-listed junior Highlands Pacific Limited
(ASX:HIG), whose stock has surged almost 50 per cent in morning trade. Shares in PanAust have dropped 3.71 per cent and are trading at $1.95.
Best and worst performers
Energy is fuelling gains, rising 27 points to 14,101. Shares in Drillsearch Energy Limited
(ASX:DLS) have advanced 2.7 per cent and trading at $1.33. Shares in Horizon Oil Limited
(ASX:HZN) and Beach Energy Limited
(ASX:BPT) are also stronger.
The materials sector is the worst performer at noon, dropping 73 points to 9,978. Shares in Northern Star Resources Limited
(ASX:NST) have fallen 5.9 per cent, trading at $0.48. Shares in Silver Lake Resources Limited
(ASX:SLR) and Sundance Resources Limited
(ASX:SDL) are also lower.
Gold and the dollar
Gold is trading at $US1,326 an ounce.
The Australian dollar is buying $US94.6 cents.
