Following another big sell off in Wall Street and tumbling oil prices overnight, the Australian share market opened lower and is 0.4 per cent down at noon. BHP has hit fresh five year lows trading as low as $27.43 this morning as investors ditch resource stocks. Meanwhile a surprise hike of a key interest rate in Russia from 10.5 per cent to a hefty 17 per cent has halted the plunging rouble. The currency has recovered from record lows of 67.14 again the US dollar to trade as high as 60.00.
The S&P/ASX 200 index is 19 points down at 5,168. On the futures market the SPI is 9 points lower.
Economic news
Minutes from the December meeting of the Reserve Bank showed members noted the decline in commodity prices but remained upbeat about the outlook for the global economy. The central bank also said subdued labour market conditions were likely to weigh on local sentiment for some time and the inflation outlook remains within the target of 2-3 per cent despite the recent depreciation of the Aussie dollar. The RBA said the dollar remains above fundamental value and whilst there was discussion of market expectation of interest rate cuts next year the consensus was to continue the current period of stability in interest rates.
Company news
MesoBlast Limited
(ASX:MSB) today announced that it has had its disputed European patent covering the use of stem cell technology upheld by the European Patent Office. Key claims for the patent were found to be valid when originally granted and all oppositions were denied. Mesoblast CEO Silviu Itescu welcomed the news saying the company vigorously defends its more than 60 patents as a high priority in the management of its intellectual property. Shares in Mesoblast are trading up 0.24 per cent at $4.19.
Qantas Airways Limited
(ASX:QAN) has seen a drop in passenger numbers for November but managed a higher revenue yield. Qantas said total numbers decreased by 1.1 per cent from November last year and capacity dipped 2.6 per cent. However revenue per passenger kilometres rose 0.9 per cent lifting earnings per seat by nearly 3 per cent. As part of the Qantas Transformation program, the airline said it cut international availibility during the seasonally weaker month which resulted in an increase in revenue per seat of nearly 4 per cent for its international operations. Domestic yields were also higher than the same period last year. Shares in Qantas are trading up 3.08 per cent at $2.34.
Best and worst performers
The best performing sector is utilities, gaining 0.4 per cent to 5,835. Shares in APA Group have risen 1.12 per cent and trading at $7.69. Shares in AGL Energy are higher but Duet Group is trading softer.
The worst performing sector is materials, falling 1.5 per cent to 8,138. Shares in PanAust have fallen 5.09 per cent, trading at $1.30. Shares in Independence Group and Lynas Corporation are also lower.
Gold and the dollar
Gold is trading at $US1,197 an ounce.
The Australian dollar is buying 82.23 US cents.
