With Wall Street falling overnight, the Australian share market slipped at open and has extended its losses in early trade to be 0.9 per cent down at noon, led down by losses in the energy sector. Mining services companies continue to fall, with Worleyparsons the latest to paint a bleak earnings picture. The Australian dollar has jumped on comments from Federal Reserve chairman Ben Bernanke, who said the US central bank is set to keep interest rates lower for longer after the end of its quantitative easing program.
The S&P/ASX 200 index is 46 points down at 5,307. On the futures market the SPI is 51 points lower.
The pace of economic activity is set to pick up, according to the Westpac-Melbourne Institute Leading Index for October. The index rose to 1.2 per cent in the month, compared with 0.6 per cent in September. Westpac chief economist Bill Evans says recent above-trend growth in the Index is pointing to a much better outcome over the next few quarters.
Worleyparsons Limited (ASX:WOR)
shares have tanked on the back of its full year profit warning, and the sell off is spilling over into other mining services companies, with Monadelphous Group Limited (ASX:MND)
, Bradken Limited (ASX:BKN)
and UGL Limited (ASX:UGL)
all seeing heavy losses in morning trade. Worleyparsons expects underlying full year profit to come in between $260 and $300 million, having earlier issued post tax guidance of $322 million. Shares in Worleyparsons is currently the day’s worst performing stock, down 23.16 per cent at $16.59.
Soon to be renamed FKP Property Group (ASX:FKP)
says continuing strong residential sales benefitting its Residential Communities and Apartment division are aiding its progress to becoming a pure retirement group. Contracts on hand for the divisions have grown by $109 million since the end of June, due to strong land sales at sites in Brisbane, Sydney and Melbourne. FKP will be officially renamed Aveo Group on the 10th of December. Shares in FKP are trading up 1.98 per cent at $2.06.
Best and worst performers
All the major sectors are down. The sector with the fewest losses is Utilities falling 1 point to 5,409. Shares in Envestra Limited (ASX:ENV)
have risen 1.4 per cent and trading at $1.09. Shares in DUET Group (ASX:DUE)
and Spark Infrastructure Group (ASX:SKI)
are also stronger.
The worst performing sector is Energy, falling 314 points to 13,379. Shares in Worleyparsons Limited (ASX:WOR)
have fallen 23.16 per cent, trading at $16.59. Shares in Karoon Gas Australia Limited (ASX:KAR)
and Paladin Energy Limited (ASX:PDN)
are also lower.
Gold and the dollar
Gold is trading at $US1,275 an ounce and the Australian dollar is buying $US0.9426.