Market Wrap: ASX lifted by big four banks

Market Reports

The big four banks have lead the Australian share market 0.47 per cent higher after miners dragged following a 4 per cent drop in the iron ore price over the weekend. 
 
The S&P/ASX 200 index closed 26 points up to finish at 5,519. 
 
The value of trades was $4.05 billion on volume of 658 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 Commonwealth Bank of Australia (ASX:CBA).
 
On the futures market the SPI is 25 points higher.
 
Economic news

Capital city house prices have fallen for the first time in a year.  Research analysts RP Data-Rismark are reporting a 2 per cent drop in property prices for the month of May. 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 were drops in Adelaide, Perth and Hobart. Canberra and Darwin managed to buck the trend. Sydney also produced a record breaking amount of auctions with 3,411 properties under the hammer in May. 
 
And there has been a lift in manufacturing activity last month but the number 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
 
Transport company McAleese Limited (ASX:MCS) has downgraded profit guidance for the second time this year. The company says earnings are now expected in the $82 - $85 million range, down from $97 million earlier in the year. The outlook is a far cry from the $127 million it touted in its prospectus last November. The company has struggled to maintain profits since a fatal tanker accident in NSW forced hundreds of trucks off the road on safety concerns and lead to the loss of key haulage contracts. The company also admitted that previous management has been underpaying superannuation to employees in its Cootes business for several years. McAleese has declined to pay a final dividend. Shares in the company floated at $1.47 last November but today lost 2 per cent to finish at $0.49. 
 
Mining services provider Ausdrill Limited (ASX:ASL) also disappointed with the company again revising operational performance downwards. Net profit is now expected in the $25 - $30 million range, down from earlier forecasts of about $35 million. Ausdrill says while most of its business is performing in line with management expectations, its 50 per cent joint venture in African Underground Mining Services has been a significant drag on revenue. The company says that as long as there is not a significant fall in commodity prices soon, it’s of the hope the current mining downturn has bottomed out. But, any recovery will be slow with challenging market conditions expected to continue into well into 2015. Shares in Ausdrill shed 11.28 per cent to close at $0.86.
 
Shares in Karoon Gas Australia Limited (ASX:KAR) have skyrocketed on news the company has discharged its 40 per cent interest in Browse Basin exploration permits to Origin Energy (ASX:ORG) for upwards of $860 million dollars.
 
The board of SAI Global Limited (ASX:SAI) will set up a formal process of review and open up its books to a number of suitors that have stepped forward. The company was given a $1.1 billion offer by Pacific Equity Partners last week. 
 
Shares in exploration company FAR Limited (ASX:FAR) have slipped backwards after coming out of a trading halt, The company announced it had raised $8 million for exploration off shore of Kenya. 
 
Retailer RCG Corporation (ASX:RCG) has blamed warm weather and a loss of consumer confidence around the Federal Budget for its poor sales figures. The company lowered full year guidance from 15 per cent growth to between 10 and 12 per cent growth.
 
Best and worst performers of the day

The best performing sector was health adding 140 points to close at 14,822 .The worst performing sector was materials, losing 34 points to close at 9,829 points.
 
The best performing stock in the S&P/ASX 200 was Karoon Gas, rising 42.68 per cent to close at $3.51. Shares in Lynas Corporation and UGL also closed higher.
 
The worst performing stock was Regis Resources, dropping 4.18 per cent to close at $1.49. Shares in Origin Energy and Northern Star Resources also closed lower. 
 
Commodities

Gold is buying $US1,242 an ounce. Light crude is $0.87 lower at $US102.71 a barrel. The Australian dollar is buying 92.59 US cents.