The Australian share market fought back from the days lows in afternoon trade, edging to a flat finish on a fairly subdued trading day, with materials leading the gains for the major sectors. Investors remain cautious about the US Federal Reserves stimulus plans, although Commonwealth Bank investors toasted the big banks boom quarterly profit by sending it to a fresh record high.
The S&P/ASX 200 index closed 0.5 points down to finish at 5,432. The value of trades was $4.5 billion on volume of 733 million shares at the close of trade. The top three stocks by value were Commonwealth Bank of Australia
(ASX:CBA), BHP Billiton Limited
(ASX:BHP) and Westpac Banking Corporation
(ASX:WBC).
On the futures market the SPI is 1 point down.
Economic news
The Australian Bureau of Statistics says the nation’s trade deficit narrowed more than expected in September, coming in at $284 million. Economists had been expecting the deficit to narrow to $350 million in the month, down from August’s downwardly revised $693 million. The ABS says exports were flat in September, while imports fell by one per cent.
Company news
Engineering and maintenance firm Downer EDI Limited
(ASX:DOW) has reiterated flat full year profit guidance as its rail business takes time to adjust to the mining sector slowdown. CEO Grant Fenn told shareholders that Downer’s locomotive business has been affected significantly by the drop-off in mining demand, and is undergoing substantial change, with a strong focus on productivity. Although the transformation will take time, Mr Fenn says there is a significant market for Downer’s rail services, particularly as state governments and private operators look to improve the efficiency of their operations and networks. Shares in Downer EDI closed 1.7 per cent down at $5.19.
National Australia Bank Limited
(ASX:NAB) is reportedly set to launch a $500 million hybrid offer, moving to shore up tier one capital before global regulatory standard Basel III is rolled out. According to various media reports the deal, which NAB remains open to upsizing, will be announced officially on Monday. Shares in NAB closed 0.25 per cent up at $35.89.
Commonwealth Bank of Australia
(ASX:CBA) says a combination of solid revenue growth and cost discipline has generated a strong first-quarter profit of $2.1 billion, which sent its shares to a new record high today.
AMP Limited
(ASX:AMP) shares eased today as the insurer announced it is looking to raise $200 million in capital through a new offer of ASX-listed, subordinated, unsecured debt securities.
Archer Daniels Midland says its pending Graincorp Limited
(ASX:GNC) takeover won’t mean restricted access to ports or increasing fees to uncompetitive levels, as the federal government is currently considering whether to approve a $3.4 billion offer.
Virgin Australia Holdings Limited
(ASX:VAH) shares fell 1.19 per cent despite the carrier adding five new destinations to its network across Indonesia as part of its codeshare expansion with Singapore Airlines.
Best and worst performers
The best performing sector was Materials adding 61 points to close at 10,162.
The worst performing sector was Health Care, losing 130 points to close at 13,891.
The best performing stock in the S&PASX 200 was Atlas Iron Limited
(ASX:AGO), rising 7.34 per cent to close at $1.17. Shares in Fortescue Metals Group Limited
(ASX:FMG) and Lynas Corporation Limited
(ASX:LYC) also closed higher.
The worst performing stock was Alacer Gold Corp - CDI
(ASX:AQG), dropping 9.44 per cent to close at $2.59. Shares in Medusa Mining Limited
(ASX:MML) and Decmil Group Limited
(ASX:DCG) also closed lower.
Commodities
Gold is trading at $US1,315 an ounce. Light crude is $1.25 down at $US93.37 a barrel.
The Australian dollar
The Australian dollar is buying $US0.9517.
