Following a soft lead from Wall Street and mixed leads from Europe, the Australian share market opened lower before recovering to be 0.19 per cent up at noon. Reporting season is in full swing with investors punishing some disappointing results.
The S&P/ASX 200 index is 12.5 points up at 5,235. On the futures market the SPI is 16 points higher.
Economic news
The ABS has reported owner occupied housing finance commitments were expected to rise 0.7 per cent in December but instead have fallen 1.9 per cent. The result comes on the back of a 1.4 per cent rise in November.
Also from the ABS, the house price index posted a year-on-year rise of 9.3 per cent. That represents quarterly gain of 3.4 per cent for the fourth quarter. Sydney lead the rise with a 13.8 per cent rise, while prices in Canberra lost 0.3 of a per cent.
Company news
Investors are punishing Cochlear Limited
(ASX:COH) for some disappointing earnings results. The company has recorded a fall in EBIT 54% for the first half of Fiscal 2014, falling from $108.3 million in H1 2013 to $49.4 million for H1 this year. Net profit fell similar a similar percentage.
Regulatory approval remains outstanding on a number of new products, slowing their release while also depressing sales of existing products. Despite the regulatory difficulties, new lines of product were released in Q2 and sales improved 30% over Q1.
Shares in Cochlear Limited
(ASX:COH) are trading down 9.81 per cent at $53.11.
Macquarie Group Limited
(ASX:MQG) has reaffirmed guidance and forecast a $1.2 billion net profit for the year to March 31, according to a poll of three independent analysts. Mac told the ASX it expects improved market conditions to facilitate an improved annual profit in fiscal 2014 and is following a strategy of de-risking existing investment banking operations by growing its exposure to more reliable businesses.
Despite the assurances, Shares in Macquarie Group Limited
(ASX:MQG) are trading down 3.43 per cent at $53.71.
The best and worst performers The best performing sector is Financials excluding REITs gaining 58 points to 6,754. Shares in QBE Insurance Group Ltd
(ASX:QBE) have risen 3.36 per cent and trading at $11.37. Shares in Australia and New Zealand Banking Group
(ASX:ANZ) and Challenger Ltd
(ASX:CGF) are also stronger.
Not surprisingly, the worst performing sector is Health Care, falling 76 points to 14,221. As mentioned, shares in Cochlear Limited
(ASX:COH) have fallen 9.81 per cent, trading at $53.11. Shares in Acrux Limited
(ASX:ACR) and Mesoblast limited
(ASX:MSB) are also lower.
Commodities
Gold and the dollar: Gold is trading at $US1,277 an ounce.
The Australian dollar is buying $US0.8970.
