Market Wrap: Aus shares close 0.5% lower

Market Reports

The Australian share market closed 0.5 per cent down after QANTAS announced a dismal set of results, followed by soft ABS business investment data that sparked fears any non-mining recovery may be weak. All major sectors experienced softness.

The S&P/ASX 200 index closed 26 points down to finish at 5,411. 
 
The value of trades was $4.4 billion on volume of 858 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited (ASX:BHP), Rio Tinto Limited (ASX:RIO) and QBE Insurance Group Limited (ASX:QBE).
 
On the futures market the SPI is 43 points down.

US Economic news

The S&P/Case-Shiller House Price index has risen at its fastest rate since the mid-2000 bubble years. Home prices rose 11.3% across the US in December 2013 from a year earlier, matching the index's best year since 2005. Analysts suggested home price appreciation has lately been driven more by a lack of supply than a surge in demand.
 
Company news 
 
Today’s poor result from Qantas Airways Limited (ASX:QAN) was the catalyst for the multi-sector slide. The airline this morning announced 5000 job losses across all of its operations and a $252 million underlying first half loss on revenue of $7.9 billion, down 4%.
 
The airline will also sell old planes and defer the purchase of new ones as well as discontinue under-performing routes. Qantas also announced an agreement with Brisbane Airport to sell its lease back to the airport corporation for $112 million. 
 
CEO Alan Joyce says the disappointing numbers are a result of lack lustre sales in the local market, increasing fuel costs and an uneven playing field against its international competitors. Mr Joyce said the airline would take unprecedented action to strengthen the core of the business but there are more tough decisions ahead. 
 
Qantas has declined to pay a dividend and whilst the CEO affirmed the airline’s commitment to return to profit, the airline could not provide any future profit guidance due to the uncertainty of future plans. Shares in Qantas Airways closed 9.06 per cent down at $1.16. 
 
Nine Entertainment Co Holdings Ltd (ASX:NEC) has announced a turnaround in its fortunes with the media company posting a half year profit and a rise in revenue.
 
Net profit was $31.7M for the six months to 31 Dec 2013 on revenue of $802.7M, 22% higher than the same time last year.
 
Chief Executive David Gyngell attributed the positive result to a solid performance in the ratings, citing the success of the Australian cricket team and a good performance for home improvement powerhouse “The Block’. A strong Australian drama line-up also bolstered performance in what is generally the company’s softest quarter.
 
Mr Gyngell said the better than expected result puts the company on track to achieve its full year profit guidance of $139.5 million.
 
No interim dividend was declared. Shares in Nine Entertainment Co closed 0.44 per cent up at $2.29. 
 
Kevin Russell, CEO of Singapore Telecommunications Limited (ASX:SGT) Australian arm OPTUS has resigned after only two years in the role. Mr Russell will reportedly leave the company on March 31 and will be temporarily replaced Paul O’Sullivan, SingTel’s current consumer chief and a former Optus CEO. Shares in SingTel are trading up 0.31 per cent.
 
Transfield Services Limited (ASX:TSE) has made a profit for the first half of Fiscal 2014 of $4.6 millionon first half on revenues of $1.81B, a 102 per cent improvement . 
 
The services company has recorded strengthened performances in its core Australian and New Zealand infrastructure contracts and says its cost reductions have also had an impact. Transfield announced this week it had been awarded several large contracts in relation to immigration facilities on Nauru and Manus Island.
 
The company will not pay an interim dividend but hopes to stay on track for a solid full year result. Shares in Transfield are trading down 11.92 per cent. 
 
Perpetual Limited (ASX:PPT) underlying net profit rose 22 per cent to $33.3m in the first half of Fiscal 2014 on revenue of $204.9M. The company put the result down to $6m in cost savings so far this year, stronger share markets and new income from its takeover of The Trust Company. Perpetual has lifted its interim dividend to 80c, up by 60 per cent from 50c a year ago. Shares in Perpetual Limited are trading up 2.19 per cent. 
 
The best and worst performers

All major sectors lost ground today. The sector with the smallest losses was Financials excluding REITs losing 7 points to close at 7,002.The worst performing sector was Industrials, losing 57 points to close at 4,045 points.
 
The best performing stock in the S&P/ASX 200 was Henderson Group (ASX:HGG), rising 4.93 per cent to close at $4.68. Shares in WHITEHAVEN COAL LIMITED (ASX:WHC) and Virtus Health Limited (ASX:VRT) also closed higher.
 
The worst performing stock was Transfield Services Limited (ASX:TSE), hurt by that weak result, dropping 11.92 per cent to close at $0.85. Shares in ALS Limited (ASX:ALQ) and NRW Holdings Limited (ASX:NWH) also closed lower. 

Commodities

Gold is buying $US1,328 an ounce. Light crude is $0.76 up at $US102.59 a barrel.

The Australian dollar is buying $US0.8944.