Market Wrap: ASX dips on China data

Market Reports

Despite soft leads the Australian share market opened higher as the profit results rolled in but erased most of the session’s gains, after the release of weaker than expected Chinese manufacturing data, to end just 0.2 per cent higher. 
 
The S&P/ASX 200 index finished 8 points higher at 4,384. On the futures market the SPI is 3 points higher. 

Economic news

A preliminary read on manufacturing activity in China has dropped to a nine month low. The HSBC flash Purchasing Managers Index (PMI) fell to 47.8 in August, down from 49.3 the month before with a read below 50 indicating contracting activity. HSBC’s chief China economist says falling orders dragged down the August Flash PMI suggesting Chinese producers are still struggling with strong global headwinds. 

Profit results

QR National (ASX:QRN) has announced a higher than expected net profit, confirmed plans to shed 750 workers and outlined plans to buy back of up to 10 per cent of its shares. Australia’s largest rail freight company attributed its transformation and growth strategy for improving its net profit by 22 per cent to $441 million in fiscal 2012. Shares in QR National rose 2.31 per cent today, closing at $3.55. 
 
David Jones Limited (ASX:DJS) has reported a 4.6 per cent fall in its full year sales and confirmed it expects its full year net profit to fall by up to 40 per cent. CEO Paul Zahra says the department store retailer experienced challenging trading conditions in the fourth quarter but noted an improvement in its sales tracking. Shares in David Jones fell 5.43 per cent today, closing at $2.44. 
 
Iron ore producer Fortescue Metals Group Limited (ASX:FMG) has increased its annual net profit by 53 per cent to $1.5 billion and confirmed it will persist with expansion plans in the Pilbara. 
 
Australia’s largest airline Qantas Airways Limited (ASX:QAN) has blamed high fuel costs, industrial action and market volatility for swinging to an annual loss of $245 million, its first loss since privatisation in 1995. 
 
Energy provider Origin Energy Limited (ASX:ORG) has achieved a stronger net and underlying full year profit on the back of asset sales, acquisitions and higher commodity prices. 

Insurance Australia Group Limited’s (ASX:IAG) net profit has fallen 17 per cent as it wrote down the value of its UK business and flagged a review of the operations. 
 
Best and worst performers

The best performing sector was materials adding 115 points to close at 9,857.
The worst performing sector was consumer discretionary, losing 14 points to close at 1,269 points.
 
The best performing stock in the S&PASX 200 was Kingsgate Consolidated Limited (ASX:KCN), rising 13.38 per cent to close at $5.17. Shares in Gryphon Minerals Limited (ASX:GRY) and Intrepid Mines Limited (ASX:IAU) also closed higher.
 
The worst performing stock was Mount Gibson Iron Limited (ASX:MGX), dropping 11.05 per cent to close at $0.84. Shares in Fairfax Media Limited (ASX:FXJ) and Arrium Limited (ASX:ARI) also closed lower. 
 
Commodities

Gold is trading at $US1,667 an ounce. Light crude is $0.21 up at $US98.21 a barrel.

The Australian dollar

The Australian dollar is buying $US1.051.