Despite weak positive leads from overseas markets, the Australian share market has opened sharply lower on the final day of the 2014 financial year and is currently recovering a little to be 0.34 per cent down at noon.
The S&P/ASX 200 index is 23 points down at 5,422. On the futures market the SPI is 33 points lower.
Looking at economic news: The Housing Industry Association says sales of new homes in Australia fell by 4.3 per cent in May. This is the first downturn in 5 months indicating the property cycle may have reached a peak. However sales grew by 3.8 per cent in the three months to May showing a 21 per cent increase on the same three months last year. Multi unit sales have plunged 16.1 per cent in May while detached house sales slipped 2.2 per cent.
Company news
Qantas Airways Limited
(ASX:QAN) says it’s expecting zero growth for the first three months of the new financial year. Passenger revenue for May was one percentage point lower than the previous year. Qantas says demand for its domestic services has been hit hard by weak consumer confidence and business sentiment. The airline recently unveiled a new business lounge at Los Angeles International Airport and now boasts 10 million members in its frequent flyer programme. However these developments are having little impact on seat demand and yields with Qantas putting the loss of international yield down to high levels of competitor capacity growth into Australia.
Shares in Qantas are trading 4.12 per cent lower at $1.28.
Mobile financial services company eServGlobal Limited
(ASX:ESV) (AIM:ESG) has announced a 24 per cent increase to $16.9 million in first half revenue. Half yearly earnings after tax rose to $0.9 million rebounding from a $0.7 million loss in the previous corresponding period. eServGlobal says the company has achieved strong organic growth in core business and sustained healthy repeat business. CEO Paolo Montessori said the results demonstrate that eServGlobal is a market leader with a profitable business, a strong pipeline of work and a substantial customer base. EServGlobal’s core business provides total mobile financial services for emerging markets where people don’t have easy access to traditional banking.
The company also announced the appointment of Duncan Lewis as new non-executive Chairman to the Board of Directors effective immediately.
Shares in eServGlobal are trading 0.67 per cent lower at $0.74.
Best and worst performers
The best performing sector is consumer staples gaining 2 points to 9,834. Shares in Wesfarmers have risen 0.62 per cent and trading at $42.10. Shares in Coca Cola Amatil and Treasury Wine Estates are also stronger.
The worst performing sector is utilities,falling 44 points to 5,905. Shares in Duet Group have fallen 1.43 per cent, trading at $2.42. Shares in Spark Infrastructure and APA Group are also lower.
Gold and the dollar
Gold is trading at $US1,316 an ounce.
The Australian dollar is buying 94.21 US cents.
