Midday: AUD tumbles on retail data

Market Reports

With no strong offshore leads to cling to- despite Wall Street eking out small gains to close at record highs-  the Australian share market slipped to start the week and is 0.2 per cent down at midday, with materials stocks helping to prop things up at this stage.
The Australian dollar has touched a new three year low on the back of disappointing retail sales data, hitting $US0.8856.   
 
The S&P/ASX 200 index is 11 points down at 5,106. On the futures market the SPI is 8 points lower. 
 
Economic news
 
The Australian Industry Group’s Performance of Services Index has reached its lowest level since the GFC, falling 2.1 points to 39.4 in July, well below the 50 threshold which indicates ongoing contraction. The index was dragged down by sharp falls in both sales and new orders. 
 
TD Securities and the Melbourne Institute’s inflation gauge for July says the rate of inflation increased in July however remains within the RBA’s 2-3 per cent target band. The monthly inflation gauge rose by 0.5 per cent, pushing the yearly rate to 2.7 per cent. Price rises for petrol and holiday accommodation were the main factors behind the rise.
 
The Australian Bureau of Statistics says retail sales were flat in June, following a 0.1 per cent rise in May. Economists had tipped a 0.4 per cent rise. The disappointing figures will only increase pressure on the RBA to deliver another interest rate cut when it convenes tomorrow. 
 
Company news 
 
Envestra Limited (ASX:ENV) has spurned a highly conditional takeover offer from pipeline operator APA Group (ASX:APA), declaring it to be too low and not in the best shareholder interest. Chairman John Allpass says that following a thorough review of the $2 billion bid, it was concluded that it does not represent a fair exchange of value Envestra’s shareholders, given the company’s highly attractive portfolio of gas distribution networks in Australia’s key markets. Shares in Envestra are trading flat at $1.12. 
 
Paladin Energy Limited (ASX:PDN) shares are nearing eight year lows following the completion of a share placement over the weekened. $88 million was raised at 70 cents per share, significantly lower than Paladin’s last trading price of $1. Shares in Paladin are trading down 27.5 per cent at $0.72. 
  
Best and worst performers

The best performing sector is Materials gaining 14 points to 9,518. Shares in Northern Star Resources Limited (ASX:NST) have risen 7.91 per cent and trading at $0.85. Shares in Resolute Mining Limited (ASX:RSG) and Marengo Mining Limited (ASX:MMC) are also stronger. 
 
The worst performing sector is Healthcare, falling 134 points to 13,736. Shares in Ramsay Health Care Limited (ASX:RHC) have fallen 1.83 per cent, trading at $35.99. Shares in CSL Limited (ASX:CSL) and ResMed Inc.(ASX:RMD) are also lower. 
 
Gold and the dollar

Gold is trading at $US1,314 an ounce and the Australian dollar is buying $US0.8858.