Australian shares closed 1.54 per cent down as weak industrial activity numbers from China started general pessimism that impacted all major sectors despite positive local lending data.
Weekly Wrap
Today, the S&P/ASX 200 index closed 83 points down to finish at 5,329.
Over the week the index dropped 133 points.
The value of trades today was $4.4 billion on volume of 756 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited
(ASX:BHP), Rio Tinto Limited
(ASX:RIO) and Commonwealth Bank of Australia
(ASX:CBA).
On the futures market the SPI is 89 points down.
Wall Street
US stocks have dropped over the four trading days this week: The Dow Jones Industrial Average lost 313 points. The S&P 500 Index down 31 points. The NASDAQ slid 92 points. The 100 Index also lost 69 points.
Company news
Qantas Airways Limited
(ASX:QAN) CEO Alan Joyce has told a senate enquiry Australia should look at Qantas as a national strategic asset. The enquiry is looking at amendments to the Qantas Sale Act.
The Lower House has passed the amendments but the Senate is expected to vote against the measure changes which will allow greater foreign ownership of the airline as well as the relocation of key support and maintenance facilities offshore. Mr Joyce has said Qantas faces an uneven playing field with both foreign-owned domestic and state-owned international competitors.
Earlier, the managing director of aviation consulting specialists, CAPA Consulting Ian Thomas told the enquiry it was hard to understand why Qantas suddenly needed to cut 5000 jobs rather than making smaller cuts over a period of time and the airline’s “cataclysmic adjustment” should not have been necessary. Shares in Qantas closed 0.91per cent down at $1.08.
On what was not a good day to announce bad news, shares in Adelaide Brighton Limited
(ASX:ABC) plunged over 10 per cent after they announced the possible loss of a major cement contract.
The company says it could take a $15 million write down after a major customer, in South Australia and Western Australia, indicated it plans to build its own cement production facilities.
In the announcement, Adelaide Brighton said it currently provides the customer with around 120,000 tonnes of cement a year. It says it has a supply agreement in place until the end of 2014 and it is uncertain when its customer's cement requirements will change. Shares in Adelaide Brighton closed 13.6 per cent down at $3.75.
Medical equipment supplier Unilife Corporation (ASX:UNS, NASDAQ:UNIS) has bucked the negative sentiment after announcing they had secured $US60 million of debt funding.
The US based developer of injectable drug delivery systems says it has entered into an agreement with an affiliate of OrbiMed.
Unilife Chairman and CEO Alan Shortall says OrbiMed is one of the premier healthcare investors in the world and the agreement is a significant endorsement of Unilife.
Mr Shortall says the funding provides Unilife with the necessary capital to drive business growth as it brings several large contracts with existing customers through to commercial rollout. Shares in Unilife are trading up 8.7 per cent.
The collapse of Forge group continues to create waves for ANZ Bank
(ASX:ANZ) after a receiver's report today revealed it could have been trading while insolvent since November.
Forge collapsed in mid-February, with secured debts of $506 million, of which $265 million owed is in the form of insurance bonds with QBE and Asset Insure. Forge also owes $260 million to ANZ Bank. ANZ had been aggressively pursuing a greater share of the business lending market prior to the Forge collapse and was criticised for lowering credit standards. The bank rejected the claims and has said the Forge collapse won’t have a material impact on the outlook for provisions. Shares in ANZ are trading down 1.12 per cent.
The best and worst performers of the day
All major sectors traded down today. The sector with the smallest losses was Utilities, losing 39 points to close at 5,529.5. The worst performing sector was again Materials, losing 241 points to close at 9,923 points.
The best performing stock in the S&P/ASX 200 was Alacer Gold Corp
(ASX:AQG), rising 3.83 per cent to close at $3.52. Shares in WHITEHAVEN COAL LIMITED
(ASX:WHC) and Retail Food Group Limited
(ASX:RFG) also closed higher.
The worst performing stock was Adelaide Brighton Limited
(ASX:ABC), dropping 13.6 per cent to close at $3.75. Shares in Atlas Iron Limited
(ASX:AGO) and Independence Group
(ASX:IGO) also closed lower.
Commodities
The price of gold is buying $US1,370.35 an ounce, a fresh six-month high, and is up $19.24 for the week.
Light crude is $0.21 up at $US98.20 a barrel.
The Australian dollar is buying $0.9002 and is $0.01 down over the week.
