The Australian share market plumbed six week lows in afternoon trade on the back of bank and miner sell offs, with each of the big four banks finishing in the red. A raft of local economic data did little to capture the attention of investors, although the Aussie Dollar did respond positively to better than expected building approvals from the ABS, before hitting the days high on strong HSBC Chinese manufacturing data. Among the stocks, grocery wholesaler Metcash jumped on a strong interim profit lift, while mining services provider Ausenco crashed on revelations of a profit downgrade and loan difficulties.
The S&P/ASX 200 index closed 41 points down to finish at 5,280. The value of trades was $4.1 billion on volume of 717 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited
(ASX:BHP), Westpac Banking Corporation
(ASX:WBC) and ANZ Banking Group
(ASX:ANZ).
On the futures market the SPI is 42 points down.
Economic news
Australia's manufacturing industry contracted in November, according to the Australian Industry Group’s Performance of Manufacturing Index (PMI). The index fell 5.4 points to 47.7 points in the month. Ai Group says the index fall interrupted the promising run of mild expansion in Australia’s PMI over the past two months.
The Australian Bureau of Statistics says building approvals slipped 1.8 per cent in October, well ahead of the 5 per cent fall tipped by economists. Approvals had jumped 16.9 per cent in September, and are 23.1 per cent up over the year.
Also from the ABS, Company profits rose a stronger than expected 3.9 per cent in the third quarter, after nudging up 0.4 per cent in the previous quarter.
And Inflation remained benign in November, according to the TD Securities-Melbourne Institute’s private monthly survey. Inflation grew by 0.2 per cent last month after a 0.1 per cent rise in October. In the year to November, inflation lifted by 2.4 per cent, above previous 2.1 per cent annual readings.
Company news
Ausenco Limited
(ASX:AAX) shares plummeted to all time lows today after emerging from a trading halt on the back of a profit downgrade and revelations of likely loan condition breaches. Ausenco expects a 2013 net loss of $35.7 million and has cut its sales forecast to $450 million, from an August target of $490-$520 million for the year, while predicting 2014 sales of $440-$460 million. Shares in Ausenco closed 38 per cent down at $0.66.
Fortescue Metals Group Limited
(ASX:FMG) CFO Stephen Pearce says the miner’s modelling forecasts anticipate that the iron ore price will sit between $US110 and $US130 over the next two years. However, not all analysts agree. Credit Suisse is forecasting that iron ore prices will fall to $US115 by the end of the year and slide to $US90 by the end of next year. Shares in Fortescue closed 1.94 per cent down at $5.57.
Whitehaven Coal Limited
(ASX:WHC) has been granted approval from its lenders to amend its $1.2 billion debt facility following delays in getting its key Maules Creek project up and running.
Coca-Cola Amatil Limited
(ASX:CCL) announced the appointment of Alison Watkins as Group Managing Director, just hours after Graincorp Limited
(ASX:GNC) reported her departure.
Metcash Limited
(ASX:MTS) shares jumped 7.54 per cent to be the day’s best performing stock lifted its half year net profit by 20.6 per cent to $98.9 million, reflecting a reduction in discontinued operation costs with the exit from its Franklins retail operations now complete.
Oil and gas explorer Icon Energy Limited
(ASX:ICN) shares jumped 6.9 per cent after it completed an $18.8 million capital raising, comprising the sale of 80.3 million shares to Hong Kong based HK Prosperous Technology.
Best and worst performers
The best performing sector was Energy adding just 0.1 points to close at 13,188.
The worst performing sector was Healthcare, losing 90 points to close at 14,110.
The best performing stock in the S&PASX 200 was Metcash Limited
(ASX:MTS), rising 7.54 per cent to close at $3.28. Shares in Paladin Energy Limited
(ASX:PDN) and Resolute Mining Limited
(ASX:RSG) also closed higher.
The worst performing stock was Forge Group Limited
(ASX:FGE) dropping 17.33 per cent to close at $0.62. Shares in CuDeco Limited
(ASX:CDU) and Fleetwood Corporation Limited
(ASX:FWD) also closed lower.
Commodities
Gold is trading at $US1,246 an ounce. Light crude is $0.42 up at $US92.72 a barrel.
The Australian dollar
The Australian dollar is buying $US0.9160.
