The Australian share market has managed to come off its early lows to end 0.64 per cent down as bargain hunters took up some ailing energy stocks. The mid-year budget update has revealed a huge blow out in the deficit with slumping commodity prices and ‘economic headwinds’ blowing huge holes in predicted revenue.
The S&P/ASX 200 index closed 34 points down to finish at 5,186.
The value of trades was $3.6 billion on volume of 658 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited
(ASX:BHP), Commonwealth Bank of Australia
(ASX:CBA) and National Australia Bank Limited
(ASX:NAB)
On the futures market the SPI is 38 points lower.
Economic news
Forecasts from the mid-year budget update have revealed the budget deficit has blown out from $29.8 billion predicted in May to over $40 billion. The sinking iron ore price has slashed millions off expected revenue and inflation is expected to rise towards 2.5 per cent next year. GDP growth remains flat while the jobless rate is expected to increase to 6.5 per cent.
Company news
Recall Holdings Limited
(ASX:REC) has rejected a $7 share offer from US company Iron Mountain. The deal which valued Recall at more than $2 billion was dismissed as it did not reflect the fundamental value of the company. Recall was approached by Iron Mountain with a non-binding, conditional on Thursday that comprised about 18 per cent cash and 82 per cent Iron Mountain shares. Recall said it would be open to further discussions if Iron Mountain would lift its offer to fully take into account the potential value creation open to the company. Shares in Recall Holdings gained 15.31 per cent to $7.38.
Sigma Pharmaceuticals Limited
(ASX:SIP) says it’s on track to record strong earnings gains following recent acquisitions. Over $400 million of new revenue and up to $10 million in profit is expected from the additions which Sigma say have positioned it to be the market leader in Australian wholesale pharmacies. Sigma will announce 2015 full year results on 19 March 2015 and along with a fully franked final dividend. Shares in Sigma Pharmaceuticals Limited
(ASX:SIP) closed 1.35 per cent lower at $0.73.
Telstra Corporation Limited
(ASX:TLS) has revised an $11 billion deal with NBN Co to transfer ownership of its hybrid fibre-coaxial networks to the broadband provider.
Skilled Group Limited
(ASX:SKE) has appointed ex-Asciano executive Angus McKay as its new Managing Director and CEO.
Newcrest Mining Limited
(ASX:NCM) announced a new low cost, two stage plan for its Golpu copper gold project in Papua New Guinea.
And Ausdrill Limited
(ASX:ASL) announced a successful $125 million debt refinancing as well as securing a new dual currency debt facility.
Best and worst performers
The best performing sector was energy adding 1.5 per cent to close at 10,677. The worst performing sector was staples, losing 1.94 per cent to close at 8,827 points.
The best performing stock in the S&P/ASX 200 was the aforementioned Recall Holdings, rising 15.31 per cent to close at $7.38. Shares in Southern Cross Media and Senex Energy also closed higher.
The worst performing stock was STW Communications
(ASX:SGN), dropping 10.38 per cent to close at $0.95. Shares in Medusa Mining and Sirtex Medical also closed lower.
IPO's Australian Careers Network Limited
(ASX:ACO) started trading today. The education services provider listed with an issue price of $2.50, opened at $1.30 and closed at $1.38.
Commodities
Gold is trading at $US1,217 an ounce. Light crude is $2.11 down at $US58.08 a barrel. The Australian dollar is buying 82.39 US cents.
