Spending the session in negative territory the Australian share market ended 0.2 per cent lower. The imminent threat of a cut to US economic stimulus kept investors on the sidelines ahead of a US Federal Reserve meeting starting tomorrow.
The losses were in line with regional markets following the release of a disappointing gauge on Chinese manufacturing. The Reserve Bank of Australia’s (RBA) policy meeting minutes will be released tomorrow along with the Federal Government’s mid-year budget review - expected to reveal a wider budget deficit.
Figures
The S&P/ASX 200 index slipped 9 points by close to finish at 5,090.
The value of trades was $3.4 billion on volume of 603 million shares at the close of trade.
The top three stocks by value were BHP Billiton Limited
(ASX:BHP), Commonwealth Bank of Australia
(ASX:CBA) and Westpac Banking Corporation
(ASX:WBC).
On the futures market the SPI is 1 point lower.
Chinese economic news
An index providing a preliminary read of business activity in China’s manufacturing sector has fallen to a three-month low, according to a private sector survey. HSBC and Markit’s Flash Purchasing Managers’ Index unexpectedly fell to 50.5 from a final read of 50.9 in November. A read above 50 indicates activity is in expansion territory.
Australian economic news
Construction jobs in the mining sector could plunge by as much as 90 per cent by 2018, according to a federal statutory authority. The Australia Workforce and Productivity Agency 2013 resources skills study shows more than 78,000 jobs in the resources industry construction workforce could disappear to just 7,700 jobs by 2018. However, the fall could be partially offset by forecast rising demand in the oil and gas sector and stronger growth in mining operations jobs.
Company news
Insurance giant Insurance Australia Group Limited
(ASX:IAG) has made a $1.8 billion move to buy the insurance underwriting business of Perth based conglomerate Wesfarmers Limited
(ASX:WES). IAG expects the integration of the businesses to generate net synergies of about $140 million per annum pre tax. Wesfarmers says it will book a pre-tax profit of up to $750 million in its second half as a result of the sale. Shares in Wesfarmers rose 0.51 per cent today to finish the session at $41.51.
AWE Limited
(ASX:AWE) got a boost as the oil and gas explorer rejected a $750 million takeover proposal from a fellow Cooper Basin player. Senex Energy Limited
(ASX:SXY) had hoped for a friendly merger but AWE formally rejected the conditional proposal earlier today after which Senex withdrew its bid. While share in Senex Energy dropped more than 8 per cent by close, shares in AWE jumped 7.17 per cent to finish the session at $1.27.
Rail operator Aurizon Holdings Limited
(ASX:AZJ) has flagged asset impairments of up to $197 million as a result of cutting fleet no longer required and scaling back infrastructure plans.
A 50:50 joint venture between construction giant’s Leighton Holdings Limited
(ASX:LEI) and Mirvac Group
(ASX:MGR) has been selected as preferred developer to work on a project which forms part of the wider $5.2 billion Perth City Link project.
Investment company Challenger Limited
(ASX:CGF) has entered into an agreement to buy SMSF actuarial certificates provider Bendzulla Actuarial for $25 million and plans to expand Bendzulla’s service offerings to SMSF customers and their accountants.
Data centre operator Nextdc Limited
(ASX:NXT) has struck a deal with Telstra Corporation Limited
(ASX:TLS) which will give Australia’s largest telco access to Nextdc’s data centres across Australia.
Best and worst performers
The best performing sector was utilities, adding 47 points to close at 5,348.
The worst performing sector was energy, losing 81 points to close at 12,944 points.
The best performing stock in the S&PASX 200 was Monadelphous Group Limited
(ASX:MND), rising 10.07 per cent to close at $16.51. Shares in UGL Limited
(ASX:UGL) and Boart Longyear Limited
(ASX:BLY) also closed higher.
The worst performing stock was Senex Energy Limited
(ASX:SXY), dropping 8.44 per cent to close at $0.70. Shares in Macquarie Group (ASX:MQGDA) were lower with the company trading on a post consolidation basis relating to the distribution of Sydney Airport securities to Macquarie ordinary shareholders. Shares in Buru Energy Limited
(ASX:BRU) also closed lower.
Commodities
Gold is trading at $US1,234.50 an ounce.
Light crude is $0.90 lower at $US96.60 a barrel.
The Australian dollar
The Australian dollar is buying $US0.8953.
