Midday: Miners weigh on Aus shares

Market Reports

Negative leads saw the Australian share market open flat but equities have now dipped 0.3 per cent. Strength among the banks has failed to offset weakness in the mining sector weighed down by the majors, BHP Billiton Limited (ASX:BHP) and Rio Tinto Limited (ASX:RIO), trading lower after the recent release of production reports.

The S&P/ASX 200 index has slipped 12 points and is sitting at 4,129. On the futures market the SPI is 14 points lower.

Economic news

A gauge on the likely pace of economic activity three to nine months into the future has improved. The Westpac – Melbourne Institute Leading Index in May came in at 1.6 per cent, above April’s read of 0.2 per cent but below the long term trend of 2.6 per cent.

Company news

Commonwealth Bank of Australia (ASX:CBA) is reportedly freezing the salary of about 400 senior staff including its CEO, in a move geared to cutting costs and preventing job cuts.

Agribusiness Elders Limited (ASX:ELD) has finalised its forestry asset sale agreement and expects to gain about $60 million from the divestment of many of its pulpwood forestry assets in the Albany, Bunbury and Green Triangle regions.

Shares in Leyshon Resources Limited (ASX:LRL) have surged on news the China-focussed explorer has inked a deal to acquire a shale gas project near the Ordos Basin in China.

Shares in Perseus Mining Limited (ASX:PRU) have slumped to the top 200's worst performer after the gold explorer released its June quarterly activity report.

Best and worst performers

The best performing sector is Financials Excluding Real Estate Investment Trusts gaining 19 points to 4,895. Shares in Westpac Banking Corporation (ASX:WBC) have risen 0.64 per cent and trading at $22.64. Shares in National Australia Bank Limited (ASX:NAB) and Bendigo and Adelaide Bank Limited (ASX:BEN) are also stronger.

The worst performing sector is Materials, falling 144 points to 9,068. Shares in Perseus Mining Limited (ASX:PRU) have fallen 5.84 per cent, trading at $2.42. Shares in Gindalbie Metals Limited (ASX:GBG) and Iluka Resources Limited (ASX:ILU) are also lower.

 Gold and the dollar

Gold is trading at $US1,583 an ounce.
The Australian dollar is buying $US1.03.