Following mixed leads from overseas markets, the miners led the market higher on open sparked by rumours of merger between Rio Tinto and Glencore. However Rio subsequently hosed down market chatter with a statement that it had rejected a merger proposal back in August and no further discussions have been taking place.
The Australian share market is 0.96 per cent down at noon with the big four banks proving a drag ahead of the RBA interest rate decision later today. Most economists expect the rates to be left unchanged.
The S&P/ASX 200 index is 69 points down at 5,224. On the futures market the SPI is 70 points lower.
Economic news
Construction is growing at its fastest rate in nine years led by activity in the residential building sector. The AIG/HIA Performance of Construction Index jumped 4.1 points to 59.1 points in September. The index has now risen for 3 consecutive months.
Company news
GI Dynamics Incorporated
(ASX:GIC) has had commercial shipments of its Endobarrier product in the European Union suspended ... pending a review of its vigilance and reporting systems. In a statement issued after market close on Monday, GI Dynamics says shipments of its CE Marked Product for treatment of type 2 diabetes and obesity had been temporarily suspended by the EU for not meeting certain preordained standards. CEO Michael Dale says “The company is working diligently with our Notified Body and with Competent Authorities in Europe to remedy our systems and resume product shipments as soon as possible.’ However the company did not expect resolution before the end of October which would impact adversely on its third quarter revenues. Shares in GI Dynamics are trading down a sharp 32.61 per cent at $0.31.
New Standard Energy Limited
(ASX:NSE) says it will seek new opportunities for its exploration acreage in Western Australia’s Canning Basin after resuming 100 per cent control of the project. A joint venture of the Southern Canning Project between New Standard, ConocoPhillips and PetroChina came unstuck after disappointing drilling results and New Standard now wants to focus efforts on its US operations. In a statement on Monday, the oil and gas explorer says it plans to restructure the South Canning Project into a farm-out process alongside the Laurel Project in Canning Basin and Merlinleigh Project in the Carnarvon Basin. New Standard is now preparing for a drilling program at its Atascosa Project in the US in mid-October.
Shares in New Standard are flat at $0.09.
Best and worst performers
The best performing sector is materials, gaining 0.5 per cent to 9,077. Shares in Evolution Mining have risen 7.14 per cent and are trading at $0.71. Shares in Beadell Resources and Resolute Mining are also stronger.
The worst performing sector is financials excluding real estate investment trusts, falling 2 per cent to 6,826. Shares in Genworth Mortgage Insurance have fallen 3.82 per cent, trading at $3.27. Shares in Bendigo & Adelaide Bank and Magellan Financial Group are also lower.
Gold and the dollar
Gold is trading at $US1,207 an ounce.
The Australian dollar is buying 87.63 US cents.
