Midday: ASX inches higher at noon

Market Reports

Following record closes in the US markets on Friday, the Australian sharemarket is shaking off the drag from miners responding a 4 per cent drop in the iron ore price over the weekend to inch 0.18 per cent higher at noon. 
 
The S&P/ASX 200 index is 16 points up at 5,508. On the futures market the SPI is 14 points higher. 
 
Economic news

Research analysts RP Data-Rismark are reporting a 2 per cent drop in property prices for the month of May, the first drop in 12 months. Prices in Melbourne sank the most with a drop of 3.6 per cent, Brisbane eased 1.7 per cent and Sydney prices slipped 1.1 per cent. There was a drop of 1.8 per cent in Adelaide, 0.8 per cent in Perth and 0.6 per cent in Hobart. Canberra and Darwin both recorded small rises in house prices. The data shows the housing cycle has peaked despite record amount of auctions in Sydney over the autumn period. Sydney saw a record smashing 3411 homes under the hammer in May, compared to 1,960 homes in the same period last year.  
 
And the decline in the manufacturing industry has been arrested slightly but remains below the 50 level that separates expansion from contraction. The Performance of Manufacturing Index rose 4.4 points to 49.2 with many in the industry blaming the seven month decline on delayed expenditure ahead of the Federal Budget. Renewed strength in the Aussie dollar has also impacted on export markets. 
 
Company news
 
Retailer RCG Corporation (ASX:RCG) has lowered full year guidance from 15 per cent growth to between 10 and 12 per cent growth. The company is blaming the decline in consumer confidence around the Federal Budget that has adversely impacted the retail market as well as the unseasonably warm weather affecting sales of winter product. RCG’s largest business, The Athlete’s Foot continues to perform within expectations in the face flat sales from February to May.  RCG claims this is a good result considering the poor market conditions. The retailer says despite the downturn in guidance it expects no change to dividends. Shares in RCG Corporation are trading 10.79 per cent lower at $0.62. 
 
Karoon Gas Australia Limited (ASX:KAR) has discharged its 40 per cent interest in Browse Basin exploration permits to Origin Energy (ASX:ORG) for up to $860 million dollars. The deal comprises of a $600 million payment up front and further payments as the resource is developed and achieves production. The cash injection will allow Karoon Gas to develop promising oil discoveries in South America. The share price has plunged recently ahead of a trading halt while to company worked to shore up its finances.Today, shares in Karoon Gas have recovered 42.28 per cent to trade at $3.50
  
Best and worst performers

The best performing sector is property gaining 8 points to 1,071. Shares in Dexus Property have risen 1.57 per cent and are trading at $1.13. Shares in Stockland and Charter Hall are also stronger. 
 
The worst performing sector is materials, falling 74 points to 9,788. Shares in Regis Resources have fallen 3.86 per cent, trading at $1.50. Shares in Northern Star Resouces and Lynas Corp are also lower. 
 
Gold and the dollar

Gold is trading at $US1,248 an ounce.
The Australian dollar is buying 92.80 US cents.