Midday: ASX widens losses after CPI

Market Reports

Following mixed leads the Australian share market opened lower and widened losses after the release of official inflation data. The local benchmark is down 0.6 per cent at noon with all major sectors trading in the red. While the big banks are showing some resilience the major miners have dropped after BHP Billiton Limited’s (ASX:BHP) record production result disappointed. 
 
Figures
 
The S&P/ASX 200 index has fallen 33.2 points and is sitting at 5,298. On the futures market the SPI is 34 points lower. 
 
Economic news
 
Australian inflation jumped more than expected in the last three months of 2013. The Australian Bureau of Statistics reports the key measure of inflation, the Consumer Price Index (CPI), gained 0.8 per cent in the December quarter 2013 for an annual rate of 2.7 per cent. 
 
Confidence has taken a dip in the new year and slipped to a six month low. Westpac chief economist Bill Evans says, “The Index shows no signs that respondents are feeling any relief for job prospects despite the Reserve Bank of Australia's rate cuts and the recent fall in the Australian dollar. Westpac Banking Corporation (ASX:WBC) and the Melbourne Institute’s Index of Consumer Sentiment dropped 1.7 per cent to 103.3 in January but remained above 100 which indicated the number of optimists outweigh the number of pessimists. 
 
Miners on the move
 
Shares in Sundance Resources Limited (ASX:SDL) have dropped despite affirming it is well on the path to production. The iron ore explorer’s quarterly activities report says it has now closed in on key agreements for the development of the Mbalam-Nabeba Iron Ore Project in Central Africa. 
 
Shares in Medusa Mining Limited (ASX:MML) have fallen after the gold explorer announced it has ceased all mining activities in Davao in The Philippines after heavy rains caused flooding and landslides in the region.
 
Shares in Saracen Mineral Holdings Limited (ASX:SAR) have jumped after the gold explorer expanded its footprint in Western Australia through inking a deal to acquire the Thunderbox Gold Operations in the North-Eastern Goldfields of the state.  
 
Shares in Triton Minerals Limited (ASX:TON) have soared more than 30 per cent after the mineral explorer said tremendous initial drilling result from its Nicanda Hill Prospect have confirmed its belief in the overall prospectively of the Balama North Project. 
  
Best and worst performers
 
All the major sectors have slipped into negative territory: The sector with the smallest losses is real estate investment trusts, easing 2.5 points to 1,014. Shares in Commonwealth Property Office Fund (ASX:CPA) have risen 0.4 per cent and trading at $1.24. Shares in Cromwell Group (ASX:CMW) and DEXUS Property Group (ASX:DXS) are also stronger. 
 
The worst performing sector is materials, falling 168 points to 10,106. Shares in Sandfire Resources NL (ASX:SFR) have fallen 4.78 per cent, trading at $6.17. Shares in Medusa Mining Limited (ASX:MML) and Western Areas Limited (ASX:WSA) are also lower. 
 
Gold and the dollar
 
Gold is trading at $US1,242.50 an ounce.
The Australian dollar has gained on the back of a surprise lift in inflation and is currently buying $US88.66 cents.