Market Wrap: China data smashes Aussie shares

Market Reports

The Australian share market was smashed down more than 1 per cent after soft Chinese manufacturing figures fuelled fear about the nation’s economic prospects. Despite a subdued start to the session following Wall Street’s weak lead local stocks nosedived in the afternoon to near session lows. China’s worse than expected figures also hit the Australian dollar which moved as low as $US0.8802 and erased gains made after yesterday’s better than expected local inflation figures. Across the sectors all ended in negative territory with the major materials and financial sectors each down more than 1 per cent. 
The S&P/ASX 200 index plunged 56.8 points to end at 5,263. 
The value of trades was $4.4 billion on volume of 709 million shares at the close of trade. 
The top three stocks by value were BHP Billiton Limited (ASX:BHP), Commonwealth Bank of Australia (ASX:CBA) and Westpac Banking Corporation (ASX:WBC)
On the futures market the SPI is 57 points lower.
Economic news
China’s manufacturing has seen a soft start to 2014 with a preliminary gauge of activity in the world’s second largest economy sinking to a six-month low. HSBC and Markit’s Flash Purchasing Managers’ Index (PMI) dropped to 49.6 in January from 50.5 the month before. The preliminary read fell below the 50 level which separates expansion from contraction. The official PMI read is expected in a fortnight and comes after the Chinese government reported on Monday the pace of economic growth fell to a 14-year low at the end of 2013.
Company news
The $526 million battle for Warrnambool Cheese & Butter Factory Co (ASX:WCB) looks to be won with one of two remaining suitors bowing out of the race. Murray Goulburn has decided to withdraw its takeover offer for Australia's oldest dairy producer and sell its 17.7 per cent stake to rival suitor, Canadian dairy giant Saputo. Saputo’s controlling interest now sits at more than 75 per cent which has triggered a rise in the offer price from $9.20 to $9.40 a share. Shares in Warrnambool Cheese & Butter Factory gained 0.58 per cent today, ending the session at $9.47. 
Telstra Corporation Limited (ASX:TLS) has inked a deal with Telkom Indonesia to form a joint venture to provide network services in South East Asia. Australia’s biggest telco says teaming up with Indonesia’s largest telco will accelerate its growth in the region where it expects to have both Telstra entities and local market partnerships. Shares in Telstra Corporation fell 0.77 per cent today to end the session at $5.18. 
Shares in Insurance Australia Group Limited (ASX:IAG) sank after updating its annual guidance. The insurance giant has upwardly revised its full-year insurance margin guidance but cut its forecast for premium growth. 
Production reports
Newcrest Mining Limited (ASX:NCM) has boosted its December quarter production and affirmed annual production is expected to come in at the top end of its forecast range. Australia’s largest listed gold miner also affirmed its commitment to cost cutting as it moves to becoming cashflow positive in fiscal 2014.
Santos Limited (ASX:STO) says its sales revenue grew 21 per cent to a record $1.1 billion in the December quarter. Despite a slight fall in output the oil and gas producer has confirmed its annual production guidance. 
Kingsgate Consolidated Limited (ASX:KCN) has boosted its production by 7 per cent in the December quarter. The gold miner has also confirmed it is tracking well to meet its annual production targets to the top end of guidance.
Best and worst performers

All sectors ended in a sea of red: The sector with the smallest losses was consumer discretionary, losing 15 points to close at 1,777.
The worst performing sector was energy, falling 143 points to close at 13,367 points.
The best performing stock in the S&P/ASX 200 was Amcor Limited (ASX:AMC), rising 2.41 per cent to close at $10.62. Shares in Drillsearch Energy Limited (ASX:DLS) and Aurora Oil & Gas Limited (ASX:AUT) also closed higher.
The worst performers were dominated by gold stocks with the sub-index sinking 3 per cent by close. The worst performing stock was Resolute Mining Limited (ASX:RSG), dropping 8.26 per cent to close at $0.56. Shares in Evolution (ASX:EVN) and Silver Lake Resources Limited (ASX:SLR) also closed lower. 

Gold is buying $US1,235.80 an ounce. 
Light crude is $1.76 higher at $US96.73 a barrel. 

The Australian dollar is buying $US0.8805.