The Australian share market has retreated from a strong open closing essentially unchanged, just 0.08 per cent higher. Banks were caught in the cross fire after Westpac declined to pay a special dividend despite improving first half profit by more than expected. The S&P/ASX 200 index closed 4 points up to finish at 5,462.
The value of trades was $3.43 billion on volume of 539 million shares at the close of trade. The top three stocks by value were ANZ Banking Group
(ASX:ANZ),
Commonwealth Bank of Australia (ASX:CBA) and National Australia Bank Limited (ASX:NAB)
On the futures market the SPI is 2 points up.
Economic news
The AIG Performance of Services index has dropped for the second month in a row. The index has slipped 0.3 points to 48.6. Any number below 50 indicates a contraction.
Building approvals for March showed a 3.5 per cent contraction in approvals from February, well below forecast estimates of a 1.5 per cent increase. However the numbers are 20 percent up over 12 months.
And Monthly inflation figures have also risen sharply from March, up 0.4 per cent for April and 2.8 per cent higher for the previous 12 months. The numbers signal a strong case for the Reserve Banks to lift interest rates by the end of the year. The RBA meets to discuss rates tomorrow and we’ll have the latest details for you tomorrow afternoon.
Company news
Westpac Banking Corporation
(ASX:WBC) has lifted its first-half cash profit by more than expected and hiked its dividend.The bank boosted its interim cash profit by 8 per cent to $3.77 billion while its net profit gained 10 per cent to $3.62 billion.
CEO Gail Kelly says Westpac has noted signs of increased customer activity and expects the economy to gradually improve throughout this year. On these trends Mrs Kelly says it is reasonable to expect a sustained, albeit modest, lift in business activity over the remainder of this year and next. A fully-franked interim dividend of 90 cents per share has been declared. The results come after Macquarie Group Limited (ASX:MQG) and ANZ Banking Group’s (ASX:ANZ) financials beat analyst expectations last week and ahead of National Australia Bank Limited’s (ASX:NAB) results due Thursday. However the investors are selling the stock off as there was no special dividend sweetener announced. Westpac closed 1.20 per cent softer at $34.45.
Mineral exploration company Paringa Resources
(ASX:PNL) has today announced it has been granted a mine permit for its Buck Creek Thermal Coal project in the US state of Kentucky. The company will now rapidly progress development of mine construction in what it believes to be a high margin, low capital expenditure project and hopes to commence building next year. The company went into a trading halt in March as a scoping study confirmed strong fundamentals at the site which is in close proximity to existing rail and road infrastructure.
Shares in Paringa closed 17.46 per cent higher at $0.37.
Aquila Resources
(ASX:AQA) is enjoying investor favour after the coal and iron ore exploration company received intention to make a take over offer from Baosteel and Aurizon. Shares went as much as 40 per cent higher but closed up 36.33 percent.
Ardent Leisure Group
(ASX:AAD) dipped today despite a double digit rise in Q3 earnings growth.
Bendigo and Adelaide Bank Limited
(ASX:BEN) revealed it is set to buy the business and assets of Victoria’s Rural Finance Corporation for $1.78 billion. The shares are currently in a trading halt.
And ... APN News and Media Limited
(ASX:APN) has appointed Jane Hastings CEO of APN New Zealand in a newly created role set to enable greater cross selling abilities across its media brands.
Best and worst perfomers
The best performing sector was energy adding 146 points to close at 14,158.The worst performing sector was financials, losing 25 points to close at 6,096 points. The best performing stock in the S&P/ASX 200 was Aquila Resources, adding 36.33 per cent to close at $3.34. Shares in Sirius Resources and Resolute Mining also closed higher.
The worst performing stock was Ardent Leisure Group, dropping 3.79 per cent to close at $2.54. Shares in Treasury Wine Estates and Skilled Group also lost investor favour.
Commodities
Gold is buying $US1,307 an ounce. Light crude is $0.34 higher at $US99.76 a barrel. The Australian dollar is buying 92.74US cents.
