Market Wrap: ASX winded by Shanghai close

Market Reports

A 6 per cent fall in China’s Shanghai Composite Index has spooked the local market which opened strongly to be 1.3 per cent up at noon but has since shed most of its gains to end just 0.19 per cent higher. Early gains in the materials sector were wiped out by banks and pressure on consumer staples such as Woolies and Wesfarmers. 
 
The S&P/ASX 200 index closed 10 points up to finish at 5,309. 
 
The value of trades was $3.97 billion on volume of 635 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 Macquarie Group Limited (ASX:MQG)
 
On the futures market the SPI is 27 points up.
 

Economic news

The Commsec State of the States report shows that the Northern Territory has leap- frogged WA to join NSW as the best performing economy in the country.  NSW is enjoying strong retail trade, dwelling starts and business investment while the NT is reaping the benefits of huge gas projects providing good jobs growth. Victoria and QLD are in fourth and fifth positions respectively. The ACT and South Australia rank ahead of Tasmania in last place however Tassie is enjoying low unemployment and robust construction activity. 
 
The TD Securities- Melbourne Institute has indicated that annual inflation rate remains flat at 1.5 per cent bucking the usual end of year trend for a rise in inflation. December was a surprisingly soft month with inflation dipping by 0.02 per cent due mainly to an 8.9 per cent drop in petrol prices. 
 
Company news
 
Macquarie Group Limited (ASX:MQG) says it expects annual profit to rise between 10 to 20 per cent for the 2015 financial year. The anticipated growth is due to improved trading conditions and a lower Australian dollar. In July the company forecast a steady annual result and later said in September the result looks likely to be slightly up from the 2014 result of just under $1.27 billion. Shares in Macquarie Group closed 5.35 per cent higher at $58.25. 
 
 
Oil Search Limited’s (ASX:OSH) part-owned $23 billion PNG LNG project in Papua New Guinea is set for expansion. The project’s operator Exxon Mobil reached terms with the Papua New Guinea government for the development of domestic gas for electricity generation.  The deal also provides an agreed timeline and activities for an expansion train at PNG LNG supported by P'nyang, a key growth asset in Oil Search's portfolio.  Shares in Oil Search closed 4.9 per cent up at $7.49. 
 
Vocation Limited (ASX:VET) entered a trading halt today ahead of an earnings update. Last month Vocation said 2015 revenue could be as much as halved after losing key government funding. 
 
Leighton Holdings Limited (ASX:LEI) has won a $929 million contract as part of a joint venture to build a vital train link in Hong Kong. 
 
Liquefied Natural Gas Limited (ASX:LNG) says it has finalised an EPC contract joint venture with US companies KBR and SKEC to help deliver the financial close on the Magnolia LNG project in the Louisiana. 
 
And OzForex Group Limited (ASX:OFX) says that it has been informed by Westpac that the bank will no longer be able to supply banking services to the forex broking firm.
 

Best and worst performers

The best performing sector was materials adding 1.3 per cent to close at 8,355. The worst performing sector was telco services, losing 0.7 per cent to close at 2,145 points.
 
The best performing stock in the S&P/ASX 200 was Sundance Energy, rising 11.96 per cent to close at $0.52. Shares in Oz Minerals and ALS also closed higher.
 
The worst performing stock was OzForex Group, dropping 10.33 per cent to close at $2.43. Shares in Arrium and Lynas Corporation also closed lower. 

Commodities

Gold is trading at $US1,277 an ounce. Light crude is $2.18 at $US48.91a barrel. The Australian dollar is buying 82.15 cents.