Market Wrap: Aus shares close flat as miners recover

Market Reports

The Australian share market closed flat after miners rebounded from weak early trade and financials and blue chips posted gains. 

The S&P/ASX 200 index traded up and down through a thirty point range before closing 2 points up to finish at 5,414. 
 
The value of trades was $5.1 billion on volume of 958 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited (ASX:BHP), Fortescue Metals Group Limited (ASX:FMG) and Rio Tinto Limited (ASX:RIO).
 
On the futures market the SPI is 5 points down.

Economic news
 
The Roy Morgan Business Confidence survey has fallen back to pre-election levels following a steep slide in February. The index fell from 131.5 in January to 117.3 last month. The negative result was across all business sizes as well as most states and industries. 
The fall in confidence was caused by a decrease in positive feelings about where the economy is heading in the next 12 months and the next five years. Morgan says this has resulted in a decrease in business intentions to invest over the next year.

Meanwhile, the NAB monthly business conditions survey fell from a reading of 5 in January to 0 last month. NAB says manufacturing was the driving force behind the slide in conditions. The survey also showed a fall in business confidence, though not as bad as Morgan. The NAB business confidence figure fell from 9 in January to 7 last month, however a positive number indicates more businesses are optimistic than pessimistic about their outlook.
 
Company news 
 
BHP Billiton Limited (ASX:BHP) has today looked to allay investor fears after iron ore  yesterday charted its largest one-day price fall in more than four years on persistent fears over China’s economy. Speaking at the AJM Global Iron Ore and Steel Forecast conference, BHP Billiton Iron Ore President Jimmy Wilson says the company’s recent focus on productivity and capital efficient debottlenecking in its iron ore business is delivering value. 

BHP Billiton said in a release today numerous short term productivity gains as well as longer term production expansion measures are available to it. The company said they will “retain a favourable position on the iron ore cost curve underpinned by the quality of their resource base.” 
 
Analysts however have expressed fear that China has horded iron ore and that demand, and price, will continue to fall. Mr Wilson said his view that Chinese crude steel production is expected to peak at 1.1 billion tonnes, around 2025, remains unchanged. Shares in BHP Billiton closed 0.64 per cent down at $35.93. 
 
David Jones Limited (ASX:DJS) has this afternoon confirmed that Paul Zahra will be continuing in his current role as CEO & Managing Director of the retailer and the external search for a CEO successor commenced by Korn Ferry late last year has been discontinued.

Mr Zahra had announced his intention to resign in October as soon a suitable successor could be found, but has reconsidered after a board shakeup at David Jones. Shares in David Jones closed 0.9 per cent down at $3.35. 
 
Telstra Corporation Limited (ASX:TLS) has been fined $10,200 after breaching the privacy of more than 15,000 customers. 
 
Investigations undertaken by the Office of the Australian Information Commissioner (OAIC) and the Australian Communications and Media Authority (ACMA) found that between February 2012 and May 2013 the Telco made the information of 15,775 Telstra customers accessible on the internet. They found Telstra failed to take reasonable steps to ensure adequate security of the personal information it held.
 
The Telco has since agreed to undertake a number of actions and will be forced to audit its systems by the end of the current financial year. Shares in Telstra closed 1 per cent up. 
 
Coca-Cola Amatil Limited’s (ASX:CCL) subsidiary SPC Ardmona has signed a five year $70 million supply deal with Woolworths Limited (ASX:WOW) for its Select brand deciduous fruit. The embattled Victorian fruit processor made headlines last month when it was given a $100 million life-line by its parent company and the Victorian Government. 
 
Woolies says it recorded a 48 per cent increase in sales from its canned fruit category following its switch to SPC supplied canned fruit. SPC Ardmona will now be the supermarket’s largest supplier of tinned fruit with Woolies also continuing to sell SPC’s brands including SPC, Goulburn Valley and Ardmona. Shares in Coca-Cola Amatil closed 0.9 per cent up down. 
 
After yesterday announcing a $US125 million contract from an unnamed naval customer in the Middle East, Austal Limited (ASX:ASB) has today announced the inking of a contract for two more littoral combat vessels for the US Navy. The two modern warships will add $684 million to Austal’s order book, raising it to a record $3.3 billion.

Austal already has five of the ships under construction and may construct up to ten LCS for the US Navy. The company already has a fully funded contract to build ten Joint High Speed Vessels. Shares in Austal Limited closed down 1.12 per cent. 

The best and worst performers

The best performing sector was Real Estate Investment Trusts adding 9 points to close at 1,021.The worst performing sector was Industrials, losing 38 points to close at 4,120 points.

The best performing stock in the S&P/ASX 200 was Regis Resources Limited (ASX:RRL), rising 2.8 per cent to close at $2.55. Shares in Ardent Leisure Group (ASX:AAD) and Westfield Group (ASX:WDC) also closed higher.
 
The worst performing stock was Lynas Corporation Limited (ASX:LYC), dropping 8.5 per cent to close at $0.27. Shares in Energy World Corporation (ASX:EWC) and Ausdrill Limited (ASX:ASL) also closed lower. 

Commodities

Gold is buying $US1342 an ounce. Light crude is $1.46 down at $US101.12 a barrel.

The Australian dollar is buying $US0.9029. 
 

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