Market Wrap: Bank losses hit local bourse

Market Reports

The Australian share market spent the session in the red and closed 0.2 per cent down. Despite overall resilience losses in the banking sector hit the local bourse with ANZ Banking Group (ASX:ANZ) National Australia Bank Limited (ASX:NAB) and Bank of Queensland Limited (ASX:BOQ) all trading ex-dividend.
 
A soft read on Australia’s jobs market also weighed on sentiment and traders remained subdued ahead of interest rate decisions due from The European Central Bank and Bank of England this evening.
 
Figures
 
The S&P/ASX 200 index closed 12 points down at 5,422.

The value of trades was $5.8 billion on volume of 802 million shares at the close of trade. 
 
The top three stocks by value were ANZ Banking Group (ASX:ANZ), National Australia Bank Limited (ASX:NAB) and Commonwealth Bank of Australia (ASX:CBA)
 
On the futures market the SPI is 8 points higher.
 
Economic news
 
The latest report card on Australia’s labour market has fallen below expectations and highlighted a weak jobs market. The Australian Bureau of Statistics reports the nation’s unemployment rate came in at 5.7 per cent in October, after September’s jobless rate was revised up to 5.7 per cent from 5.6 per cent. The economy added 1,100 positions in October, missing expectations for a gain of 10,000 jobs. The participation rate also remained steady at 64.8 per cent.
 
Australia’s construction sector moved into expansion territory for the first time since 2010. The Australian Industry Group and the Housing Industry Association’s Performance of Construction Index rose 6.8 points to 54.4 in October, expanding above the 50-level which separates expansion from contraction.
 
Takeover talk
 
The chief of Graincorp Limited (ASX:GNC) has dismissed opposition to the proposed $3.4 billion takeover of the Australian grain handler by US grain giant Archer Daniels Midland. CEO Alison Watkins told an Australian Farm Institute conference in Sydney it is “pure fantasy” to think Australia can insulate itself from foreign investment in the agriculture sector. A decision on the proposed transaction is expected by the Australian Government on December 17, 2013. Shares in Graincorp eased 0.41 per cent today, ending at $12.15.
 
The board of Bega Cheese Limited (ASX:BGA) is putting its $435 million takeover bid for Warrnambool Cheese & Butter Factory Co (ASX:WCB) under the microscope. The New South Walers cheese marker is one of three companies pursuing Warrnambool with Canadian dairy giant Saputo offering $8 per share and Murray Goulburn Co-operative Limited putting forward a $7.50 per share bid. Bega’s cash and scrip bid sits in the middle, with an implied value of $7.80 per share, but investors will be watching for any changes to the conditions or price after the board’s meeting today. Shares in Bega Cheese rose 0.62 per cent today, ending at $4.84.
 
Company news
 
Australian Agricultural Company Limited (ASX:AAC) has widened its first half net loss to $31.6 million. The beef producer’s result was impacted by the live cattle export ban and dry conditions but the company remains optimistic its turnaround plan is on track. 
 
Fortescue Metals Group Limited’s (ASX:FMG) credit rating has been upgraded to a positive outlook by Standard & Poor's. The Pilbara focussed iron ore miner also today awarded Viento Group Limited (ASX:VIE) a $2.7 million contract for work on a rail project. 
 
Steepest falls
 
Shares in dual-listed Chorus Limited (ASX:CNU, NZE:CNU) sank 9.07 per cent after telecommunications utility provider revealed the New Zealand government has ordered an independent review to assess the company’s finances and ability to deliver projects to the government.
 
Ausdrill Limited (ASX:ASL) recorded the session’s steepest stock slump after the mining and drilling contractor warned its annual profit will dive as much as 61 per cent to between $35 and $45 million as it battles against challenging market conditions.
 
Best and worst performers
 
The best performing sector was health care, adding 139 points to close at 14,026.
The worst performing sector was financials excluding real estate investment trusts, losing 59 points to close at 7,155 points.
 
The best performing stock in the S&PASX 200 was Mesoblast Limited (ASX:MSB), rising 4.61 per cent to close at $6.36. Shares in JB Hi-Fi Limited (ASX:JBH) and Ramsay Health Care Limited (ASX:RHC) also closed higher.
 
The worst performing stock was Ausdrill Limited (ASX:ASL), slumping 28.73 per cent to close at $0.98. Shares in St. Barbara Limited (ASX:SBM) and NRW Holdings Limited (ASX:NWH) also closed lower. 
 
Commodities
 
Gold is trading at $US1,318 an ounce. 
Light crude is $1.43 higher at $US94.80 a barrel. 

The Australian dollar

The Australian dollar is buying $US94.8 cents.