Midday: ASX drops to six week low

Market Reports

Following negative leads the Australian share market dropped at the open and is more than 1 per cent down at noon. Debt issues in Europe and the US continue to knock sentiment, pushing all sectors into the red with energy and mining stocks faring the worst.

The S&P/ASX200 index has lost 49 points and is 4,114. On the futures market the SPI is 60 points lower.

Economic news

The World Trade Organisation’s annual report has cautioned global activity is slowing. The report also confirmed world export growth is expected to slow to 5.8 per cent this year, down from its previous estimate of 6.5 per cent.

Company news

One of the few bright spots across a red board is Thorn Group Limited (ASX:TGA), lifting after reporting a 30 per cent rise in its first half net profit. The company says growth in its Radio Rentals and Rentlo business underpinned a 20 per cent jump in revenue to $96 million. Earnings per share have increased to 10.08 cents and an interim dividend of 4 cents per share has been declared. Shares in Thorn Group have lifted 4.29 per cent, trading at $1.70.

Exactly one year after it started to trade on the Australian Securities Exchange, the float of QR National (ASX:QRN) has been declared a success by the Queensland government. Australia’s biggest float since Telstra Corporation (ASX:TLS) in 1997, floated at $2.45 in November last year and has since outperformed the top 200 stocks by 40 per cent. The Queensland Government is the coal haulers largest shareholder, with a 33.7 per cent interest, and says the value of the stake has now grown from about $750 million to almost $2.9 billion. Shares in QR National have moved 2.17 per cent down to $3.39. 

Best and worst performers

All sectors have retreated: The sector with the smallest losses is Telco Services, easing 6 points to 1,077. Shares in Amcom Telecommunications have gained 1.19 per cent and trading at $0.85. Shares in Telecom Corporation of New Zealand are also higher while My Net Fone is steady.

The worst performing sector is Materials, dropping 215 points to 11,010. Shares in OneSteel have lost 9.14 per cent and trading at $0.845. Shares in Iluka Resources and Rio Tinto have also fallen at noon.

New Zealand

The NZSX50 is 12 points lower: Taking a look at the top four stocks by turnover, Fletcher Building is at the top of the list with stock easing 1.17 per cent to $5.93 followed by Telecom Corporation of New Zealand, Westpac and ANZ Banking Group.

Gold and the dollar

Gold is trading at $US1,676 an ounce. The Australian dollar is buying 98.6 US cents