The Australian share market suffered through a bleak day losing 1.28 per cent as traders hit the sell button across all sectors. Iron ore prices dragged the miners lower with the potential for the spot price to drift below $US100 overnight. Softening Chinese property prices also added to concern
The S&P/ASX 200 index closed 70 points down to finish at 5,409.
The value of trades was $4.06 billion on volume of 754 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 National Australia Bank Limited
(ASX:NAB)
On the futures market the SPI is 81 points down.
Economic news
The ANZ housing market report is showing the first signs of a slowdown in the housing market. Seasonally adjusted house prices fell in all capital cities. The worst fall was in Melbourne which was down 1.4 per cent from the previous week. Melbourne has now fallen three weeks in a row showing house prices there have probably peaked. Auction sales have also slowed from strong momentum earlier in the year but remain high and demand is expected to continue.
Company news
Takeover target Goodman Fielder Limited
(ASX:GFF) has backed a sweetened bid from its suitors. Singapore-based Wilmar International and Hong Kong’s First Pacific launched their original bid for the breads and spreads manufacturer last month. After Goodman Fielder rejected the first offer of $0.65 per share its suitors lifted the price to $0.70 per share last week and again requested due diligence. The company will now open its books to Wilmar and First Pacific and has granted non-exclusive access to due diligence over the next month.
Shares in Goodman Fielder are 3.76 per cent higher at 69 cents.
Woes continue at the world’s largest drilling company Boart Longyear Limited
(ASX:BLY). At the AGM today, Chief Executive Richard O’Brien warned that exploration and mining expenditures has potential to contract further this year. He also said excess global rig capacity could further depress pricing of its services. The news follows a horror year in which Boart Longyear booked a net loss of $693 million in 2013, down from a profit of $66 million in 2012. The company has been through a heavy re-structuring, shedding 3,300 jobs and closing 65 facilities but the down turn in demand has been deep and prolonged and there are still no signs of recovery. Shares in Boart Longyear have plunged from highs of over $5 in late 2011. Today the stock shed 4.44 per cent today to close at a record low of 21 cents.
Profit downgrades were flavour of the month today.
Salmat Limited
(ASX:SLM) revised its 2014 earnings to $8 million from the $14-$16 million range it touted in February. Salmat says it’s due to a delay in orders while it rolls out a new data platform and it expects business will recover fully in 2015.
Cast steel manufacturing company Bradken Limited
(ASX:BKN) says it has to shed ten per cent of its work force as orders have not recovered from a slump. The company downgraded profit guidance to $173 million from $180 million.
GDI Property Group Limited
(ASX:GDI) is poised to establish a new external fund after inking a deal to acquire a portfolio of seven properties from engineering company UGL Limited
(ASX:UGL) in a deal worth $66.5 million.
DuluxGroup Limited
(ASX:DLX) has improved its first half net profit by 33.6 per cent to $56.1 million and forecast profit growth ahead for its full year.
Best and worst performers of the day
The sector with the least losses was utilities shedding 17 points to close at 5,887.The worst performing sector was materials, losing 191 points to close at 9,920 points. The best performing stock in the S&P/ASX 200 was Goodman Fielder, rising 3.76 per cent to close at $0.69. Shares in IOOF Holdings and Western Areas also closed higher.
The worst performing stock was UGL, dropping 9.74 per cent to close at $6.86 on talk it may have to sell its property services business DTZ. Shares in Bradken and Paladin Energy also closed lower.
Commodities
Gold is buying $US1,297 an ounce. Light crude is $0.52 up at $US102.02 a barrel. The Australian dollar is buying 93.53US cents
