Midday: ASX claws back from early dive

Market Reports

The Australian share market followed leads sharply lower at open however has clawed back early losses to be flat at midday with the weak offshore leads being softened by the impact of positive Chinese PMI data from the weekend, and a myriad of local data trickling through so far this morning. 
The S&P/ASX 200 index is 4 points down at 4,922. On the futures market the SPI is 4 points lower. 
Economic news 
Inflation inched higher in May to remain at subdued levels, providing scope for the central bank to cut the cash rate again at its monthly board meeting on Tuesday. The TD Securities Melbourne Institute Monthly Inflation Gauge increased by 0.2 per cent in May, putting annual inflation at 2.2 per cent. The increase followed a monthly rise of 0.3 per cent in April and 0.2 per cent in March.
The Australian Industry Group (AIG) performance of manufacturing index (PMI) rose 7.1 points to 43.8 in May, still in the contraction zone however vastly improved from a slumping result of 36.7 in April. The latest result extends declines for the 23rd consecutive month, however analysts expect the recent drop in the local dollar to have a positive impact for many exporters. 
The RP Data-Rismark home value index fell for the second consecutive month in May, following a drop in the nation’s consumer confidence reading. The index dropped 1.2 per cent in the month, following a 0.5 per decline in April. The downward results follow a 2.8 per cent increase in the first quarter of 2013. 
Company news
Ten Network Holdings Limited (ASX:TEN) audacious bid for cricket broadcasting rights looks set to be overwhelmed by a matched bid from incumbent rights holder channel nine. Nine’s hedge fund owners and board are reportedly set to back Chief David Gyngell’s desire to use its long standing last bid clause to match Ten’s whopping $550 million bid and bat on for a further five summers. Shares in Ten Network are trading down 0.86 per cent at $0.29. 
Pharmaxis Limited (ASX:PXS) has been advised by the US Food and Drug Administration (FDA) that its asthma drug Aridol has been included on an import alert list, preventing it from being shipped into the US. Pharmaxis says it believes the listing may relate to issues outstanding from a FDA audit of a third party packer and hopes to have the drug removed from the banned list as soon as possible. Aridol is the company’s first commercial drug and it has approximately three months inventory on hand in the US. Shares in Pharmaxis are trading down 3.23 per cent at $0.15. 
Best and worst performers

The best performing sector is Financials excluding real estate investment trusts, gaining 89 points to 6,242. Shares in Westpac Banking Corp (ASX:WBC)  have risen 2.78 per cent and trading at $29.23. Shares in National Australia Bank Limited (ASX:NAB) and Australia and New Zealand Banking Group (ASX:ANZ) are also stronger. 
The worst performing sector is Telco services, falling 21 points to 1,612. Shares in TPG Telecom Limited (ASX:TPM) have fallen 3.32 per cent, trading at $3.35. Shares in M2 Telecommunications Group Limited (ASX:MTU) and Telstra Corporation Limited (ASX:TLS) are also lower. 
Gold and the dollar

Gold is trading at $US1,395 an ounce and the Australian dollar is buying $US0.961.

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