The Australian share market heeded soft US leads to opened flat and has descended in early trade to be 0.4 per cent down at noon, with health stocks and the big banks dragging the market down, while Qantas stocks have plummeted on the back of a shock profit warning. US Fed taper fears have also hit the dollar hard, with the local currency falling below 90 US cents for the first time in three months. The dollar is also weaker against the British pound sterling and the Euro, and could come under further pressure if US job figures due on Friday are stronger than anticipated.
The S&P/ASX 200 index is 19 points down at 5,254. On the futures market the SPI is 17 points lower.
Economic news
The Australian Bureau of Statistics has released the October trade balance data, indicating that the nation’s trade deficit has widened to a seasonally adjusted $529 million for October, after hitting $271 million in September. Exports declined by 1 per cent to $27.27 billion while imports rose by 1 per cent to $27.80 billion.
Company news
Qantas Airways Limited
(ASX:QAN) shares have crashed in early trade, approaching an all time low on the back of an alarming profit update.
Alongside tipping a half year loss of between $250 and $200 million, the carrier also flagged 1000 job losses and executive pay cuts, after spending the past fortnight imploring the federal government for assistance. CEO Alan Joyce says the challenges the airline now faces are immense. Shares in Qantas are trading down 15.98 per cent at $1.01.
Nufarm Limited
(ASX:NUF) shares have slipped in early trade despite the crop protection company telling shareholders it is expecting a lift in its half year net profit. On the back of strong performance from its Brazil operations, Nufarm expects pre-tax earnings of between $50-60 million, up from $47.3 million in the corresponding period last year. Investors weren’t convinced. Shares in Nufarm are trading down 2.94 per cent at $4.62.
Best and worst performers The best performing sector is Materials gaining 69 points to 9,907. Shares in Alacer Gold Corp - CDI
(ASX:AQG) have risen 5.39 per cent and trading at $2.15. Shares in Lynas Corporation Limited
(ASX:LYC) and PanAust Limited
(ASX:PNA) are also stronger.
The worst performing sector is Healthcare, falling 87 points to 14,034. Shares in Mesoblast limited
(ASX:MSB) have fallen 2.6 per cent, trading at $6.00. Shares in ResMed Inc. (CHESS)
(ASX:RMD) and Sigma Pharmaceutical Limited
(ASX:SIP) are also lower.
Gold and the dollar
Gold is trading at $US1,238 an ounce and the Australian dollar is buying $US0.9026.
