Market Wrap: Aus shares close 0.8% lower

Market Reports

The Australian share market closed at the day’s lows, 0.8per cent down, dragged from a mid-session peek into positive territory by the materials sector, which finished 1.7 per cent lower as China released soft manufacturing data. 
 
The S&P/ASX 200 index closed 38 points down to finish at 4,888. The value of trades was $4.2 billion on volume of 774 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited (ASX:BHP), Telstra Corporation Limited (ASX:TLS) and Westpac Banking Corporation (ASX:WBC).
 
On the futures market the SPI is 48 points down.
 
Economic news
 
Australian retail sales edged slightly higher in April, just short of analyst expectations, according to the Australian Bureau of Statistics. Retail spending grew 0.2 per cent to a seasonally adjusted $21.888 billion, following an increase of 0.4 per cent in March.
 
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.
 
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 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  
 
Telstra Corporation Limited (ASX:TLS) have finished in the red for the fourth consecutive session today as investors trade on their concerns over asbestos material being discovered in the telco’s infrastructure. Despite the concerns for potential legal ramifications, Telstra has sought to assure the market it doesn’t expect to face significant financial liability from the claims. Shares in Telstra closed 1.69 per cent down at $4.66. 
 
Rio Tinto Limited (ASX:RIO) is being widely tipped to float its diamonds division for over $US2 billion on the London Stock Exchange. According to various media reports, the global miner plans to raise $250 million pounds before selling down its diamond stake in a series of tranches, while also considering floating its Pacific Aluminium division on the ASX. Shares in Rio Tinto closed 2.5 per cent down at $53.80. 
 
Transpacific Industries Group Limited (ASX:TPI) Chief Executive Officer Kevin Campbell has resigned and Australia's largest waste management company is now searching for a replacement.
 
Cochlear Limited (ASX:COH) says sales have slowed in the second half of the financial year, ahead of the launch of its newest range of products. 
 
Forge Group Limited (ASX:FGE) has acquired US based Asset Management and Engineering business Taggart Global for $US43 million.
 
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.

OGL Resources Limited (ASX:OGL) says the Queensland supreme court has dismissed an appeal aimed at preventing the reopening of the Ebenezer coal mine, and now plans on fast tracking its development. 
 
Best and worst performers

The best performing sector was Financials excluding real estate investment trusts adding 23 points to close at 6,176.
The worst performing sector was Health Care, losing 245 points to close at 12,633.
 
The best performing stock in the S&PASX 200 was Kingsgate Consolidated Limited (ASX:KCN), rising 15.34 per cent to close at $1.88. Shares in Troy Resources Limited (ASX:TRY) and Energy World Corporation Limited (ASX:EWC) also closed higher.
 
The worst performing stock was Cochlear Limited (ASX:COH), dropping 18.07 per cent to close at $52.88. Shares in Transpacific Industries Group Limited (ASX:TPI) and Maverick Drilling and Exploration Limited (ASX:MAD) also closed lower. 
 
Commodities

Gold is trading at $US1,395 an ounce. Light crude is $0.27 down at $US91.70 a barrel.

The Australian dollar

The Australian dollar is buying $US0.964. 

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