Midday: EU doubts weigh on ASX

Market Reports

Weak leads have weighed on the Australian share market, pushing equities about 1 per cent down. Doubts over the European Central Bank’s latest move to support the region have muted risk appetite. All sectors are lower, with property and industrials dragging and the retailers taking a hit after Kathmandu Holdings Limited's (ASX:KMD) profit warning.   

The S&P/ASX 200 index has dropped 40 points and is 4,099. On the futures market the SPI is 29 points down.

Company news

Shares in Kathmandu Holdings Limited (ASX:KMD) have plunged following a profit warning from the outdoor clothing and equipment retailer.
Despite Kathmandu remaining confident it can achieve full year growth, investors haven’t taken kindly to news the Christmas trading period has performed below the company’s expectations and its first half profit will fall from the year before. The retailer’s profit cut and subsequent share price tumble follows similar action from electronics retailer JB Hi-Fi Limited (ASX:JBH) at the end of last week and surfwear retailer Billabong International Limited (ASX:BBG) at the start of this week. Shares in Kathmandu Holdings have plunged 20.61 per cent and are trading at $1.31.

Shares in OneSteel Limited (ASX:OST) have jumped to the top 200’s best performer despite announcing a writedown. The steel manufacturer has blamed weak residential construction activity for a $150 million writedown it will make on the value of its LiteSteel Technologies business. Analysts have forecast OneSteel will deliver a full year net profit of about $265 million in fiscal 2012, compared to a $238 million profit achieved in fiscal 2011. Shares in OneSteel have jumped 6.18 per cent and are trading at $0.722.

Best and worst performers

All sectors are in the red: The secor with the smallest losses is Telco Services, down 0.4 points at 1,122. Shares in Hutchison Telecommunications have gained 7.14 per cent and trading at $0.06. Shares in SingTel and Telstra are also higher.

The worst performing sector is Real Estate Investment Trusts, dropping 15 points to 792. Shares in Ardent Leisure Group have retreated 7.59 per cent and trading at $1.035. Shares in CFS Retail Property Trust and DEXUS Property Group are also weaker.

IPOs

Ambassador Oil and Gas Limited (ASX:AQO) debuted on the Australian Securities Exchange this morning. The oil and gas explorer’s issue price was 20 cents, it opened at 17.5 cents and is currently trading at 19 cents.


New Zealand

The NZSX50 is 14 points lower: Taking a look at the top four stocks by turnover, Turners & Growers is at the top of the list with stock adding 1.12 per cent to $1.80 followed by Chorus, Telecom Corporation of New Zealand and Trade Me Group.

Gold and the dollar

Gold is trading at $US1,614 an ounce.
The Australian dollar is buying $US1.0075.