The Australian share market closed just off session lows, 0.8 per cent down, after investor sentiment was hit by a brutal plunge from insurer QBE on another profit downgrade, which saw the financials sector fall 1.4 per cent. Local stocks extended last week's slump and are on track to post their worst month since May and worst December performance in the 13 year history of the benchmark 200 index.
The S&P/ASX 200 index closed 42 points down to finish at 5,144. The value of trades was $4.5 billion on volume of 723 million shares at the close of trade. The top three stocks by value were QBE Insurance Group Limited
(ASX:QBE), Commonwealth Bank of Australia
(ASX:CBA) and ANZ Banking Group
(ASX:ANZ).
On the futures market the SPI is 35 points down.
Economic news
ANZ Bank released its job ads data for November, and job advertisements have weakened again despite signs of improving demand in some states. Job ads fell 0.8 per cent last month, after decreasing 0.1 per cent in October.
Company news
Metcash Limited
(ASX:MTS) will split its food and convenience operations less than two years after merging them, as part of a strategic review.
After announcing the merger last June, chief Ian Morrice today said the company’s food and grocery pillars will be run in two divisions and led by separate CEO’s, to provide a greater turnaround for the supermarkets business while optimising growth opportunities for the convenience channel. Shares in Metcash closed 4.30 per cent up at $3.15.
Qantas Airways Limited
(ASX:QAN) budget carrier Jetstar will close its aircraft base in Darwin and cut back on flights from there to several destinations as it confronts stiff competition from rival airlines. Jetstar says it makes sense to base aircraft where there is more network growth as that keeps its fares low and ensures it has the flexibility to adapt to changing market conditions. Shares in Qantas closed 3.40 per cent down at $0.99.
QBE Insurance Group Limited
(ASX:QBE) shares plummeted 22.33 per cent on the back of yet another downgrade, with the insurer forecasting a $US250 million full year loss as well as the departure of Chair Belinda Hutchinson. CEO John Neal has apologised to investors for the downgrades, admitting the insurer expanded into the United States too quickly.
TPG Telecom Limited
(ASX:TPM) shares jumped 13.59 per cent after the telco finalised a deal for the purchase of AAPT's business and wholesale divisions from New Zealand Telecom for $450 million.
PanAust Limited
(ASX:PNA) shares closed 2.69 per cent lower after the miner this morning said its full year pre-tax earnings EBITDA would likely fall to the low end of guidance of between $US260 and $US300 million.
Brambles Limited
(ASX:BXB) shares dipped 1.07 per cent despite the pooling solutions company flagging a stronger first half profit, and left unchanged its full year guidance of between $US930 - $US965 million.
Best and worst performers
The best performing sector was Telco services adding 15 points to close at 1,735.
The worst performing sector was Financials excluding Real Estate Investment Trusts, losing 110 points to close at 6,694.
The best performing stock in the S&PASX 200 was TPG Telecom Limited
(ASX:TPM), rising 13.59 per cent to close at $4.68. Shares in Whitehaven Coal Limited
(ASX:WHC) and Independence Group NL
(ASX:IGO) also closed higher.
The worst performing stock was QBE Insurance Group Limited
(ASX:QBE), dropping 22.33 per cent to close at $12.00. Shares in Forge Group Limited
(ASX:FGE) and St. Barbara Limited
(ASX:SBM) also closed lower.
IPOs Affinity Education Group Limited
(ASX:AFJ) started trading today. The Childcare service provider floated with an issue price of $1.00, opened at $1.08 and closed at $1.04. To commodities, Gold is trading at $US1,229.59 an ounce. Light crude is $0.27 up at $US97.65 a barrel. The Australian dollar is buying $US0.9107.
Vocation Limited
(ASX:VET) started trading today. The Education and training services provider floated with an issue price of $1.89, opened at $2.08 and closed at $2.03. Affinity Education Group Limited
(ASX:AFJ) started trading today. The Childcare service provider floated with an issue price of $1.00, opened at $1.08 and closed at $1.04.
Commodities Gold is trading at $US1,229.59 an ounce. Light crude is $0.27 up at $US97.65 a barrel.
The Australian dollar The Australian dollar is buying $US0.9107.
