Midday: Energy stocks slip on lower oil price

Market Reports

The Australian share market has posted a flat start to the week following Wall Street’s soft Friday finish in low holiday trading volumes. Taking a breather from last year’s solid global gains the benchmark index has also seen a lacklustre start to the new year. 
The local sectors are trading mixed with losses in energy and materials offsetting gains in telco and financial sectors. Energy falls come after the price of oil fell amid expectations of increased oil supply as Libya prepares to restart production at one of its biggest oil fields. 
The S&P/ASX 200 index has dipped 10 points and is sitting at 5,340. On the futures market the SPI is 3 points lower. 
Economic news
Australia's services sector saw a soft finish to the end of 2013 with activity shrinking at a quicker pace. The Australian Industry Group’s Performance of Services Index (PSI) fell 2.8 points to 46.1 in December with a read below 50 indicating the sector is in contraction territory. Ai Group chief executive Innes Willox says continuing weakness in the sector underlines the domestic economy’s fragility at a time when non-mining related activity is required to help rebalance the economy in the wake of the mining investment boom. 
Australia’s mergers and acquisitions (M&A) bounced-back last year. Dealogic has reported the value of Australian M&A came in at $101.1 billion in 2013, jumping 16 per cent from the year before but still below 2011’s peak of $155 billion worth of deals. The financial markets tracker also showed global M&A volume rose 9 per cent over the year to almost $3 trillion with investment bank Goldman Sachs leading the global M&A advisor ranking.
Company news
Shares in Cardno Limited (ASX:CDD) have eased 1.02 per cent after the service provider said its CEO Andrew Buckley will retire from March and will be replaced by the company’s international executive general manager Michael Renshaw. 
Shares in Austal Limited (ASX:ASB) have firmed 0.57 per cent after the ship builder announced it has concluded an option to purchase contract with a European ferry operator for a 102 metre trimaran stock vessel.
Shares in Pancontinental Oil & Gas NL (ASX:PCL) have jumped 6.25 per cent after the oil and gas explorer celebrated the start of drilling at the Sunbird-1 Well in licence area L10A offshore Kenya.
Shares in Indochine Mining Limited (ASX:IDC) have climbed 14.58 per cent after the Papua New Guinea (PNG)-focussed miner said it is on track to apply for a mining licence in August with its landowner investigation study almost finished and strong support received from local landowner clan groups. 
Best and worst performers
The best performing sector is financials gaining 1.7 points to 5,877. Shares in Challenger Limited (ASX:CGF) have risen 2.41 per cent and trading at $6.37. Shares in Mirvac Group (ASX:MGR) and Henderson Group PLC (ASX:HGG) are also stronger. 
The worst performing sector is energy, falling 119 points to 13,379. Shares in Karoon Gas Australia Limited (ASX:KAR) have fallen 2.3 per cent, trading at $4.25. Shares in Santos Limited (ASX:STO) and Horizon Oil Limited (ASX:HZN) are also lower. 
Valence Industries Limited (ASX:VXL) started trading today. The company is focussed on the exploration, production, processing and sale of graphite and floated with an issue price of $0.20, opened at $0.20 and is currently trading at $0.20.    
Gold and the dollar
Gold is trading at $US1,235 an ounce. 
The Australian dollar is buying $US0.8976.

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