Australia’s benchmark index has accelerated this week’s slide south and under the 5,400 mark but bounced from the morning low before noon. Negative leads and soft retailing results on Wall Street pushed local stocks down steeply at open and the benchmark is now 0.5 per cent down. Investors have also been rattled by a weak read on local consumer sentiment and the tumbling price of iron ore, Australia’s biggest export.
Most sectors are now trading in the red led by the major miners suffering from weaker metals prices. The telco sector is defying the trend driven by Telstra Corporation Limited
(ASX:TLS) rising above yesterday’s nine-year closing high.
Figures
The S&P/ASX 200 index has sunk 23 points to 5,397. On the futures market the SPI is 29 points down.
Economic news
Tony Abbott’s first Federal Budget has smashed consumer sentiment to its lowest level since August 2011 before the Reserve Bank of Australia (RBA) started its recent rate cut cycle. Westpac Banking Corporation
(ASX:WBC) and the Melbourne Institute’s Index of Consumer Sentiment retreated 6.8 per cent to 92.9 in May from 99.7 the month before. Westpac’s Chief Economist Bill Evans says the sharp fall is a clear indication of an unfavourable response to the recent Federal Budget.
Market movers
Shares in Moko Social Media Limited
(ASX:MKB) have jumped against a benchmark fall after posting a positive market update. The Australia-based integrated global social media company says its US Mobile advertising business unit has generated almost 250 per cent sales growth this year. Today’s announcement comes one day after Moko Social Media filed for a $10 million listing on the US tech-heavy Nasdaq index. Shares in Moko Social Media have jumped 12.9 per cent and are trading at $0.18.
Shares in Liquefied Natural Gas Limited
(ASX:LNG) have plunged after revealing one of its major shareholders has sold down its stake in the company. China-based HQC will no longer be a substantial shareholder after selling just over 43 million of its shares to retain only 10 million.
The liquefied natural gas developer says the shares have been placed with US and Australian institutional investors. Shares in Liquefied Natural Gas have plunged 12.82 per cent and are trading at $0.85.
Best and worst performers
Most sectors are trading lower: Defying the downwards trend telco services has gained 17 points to 1,861. Shares in M2 Group Limited
(ASX:MTU) have risen 1.35 per cent and trading at $5.99. Shares in Telstra Corporation Limited
(ASX:TLS) and TPG Telecom Limited
(ASX:TPM) are also stronger.
The worst performing sector is materials, retreating 131 points to 9,814. Shares in Adelaide Brighton Limited
(ASX:ABC) have fallen 3.47 per cent, trading at $3.62. Shares in Fortescue Metals Group Limited
(ASX:FMG) and Western Areas Limited
(ASX:WSA) are also lower.
Gold and the dollar
Gold has firmed to $US1,294 an ounce.
The Australian dollar has remained at a three-week low and is buying $US0.924.
