Aussie stocks well down by lunch
The Australian sharemarket had lost 1.3% by midday Friday following a weak lead from global equity and commodity markets. Financials lost the most ground as every sector fell below the line.
At noon, the All Ords lost 59.8 to 4,708.0, while the ASX/200 shed 61.6 to 4,687.6. About 1 billion shares worth around $1.5 billion had changed hands.
Banks and Financials struggled, resulting in a 1.7% fall for the sector. The big four were all more than 1.2% below the line, with ANZ and Westpac down 2.5% and 2% to $21.70 and $24.19.
Insurer IAG dropped 26c, or 6.2% to $3.95, while QBE bucked the trend by adding 25c to $22.80. Reports surfaced that QBE’s bid for IAG is unlikely.
A fall in metals prices on the LME sent resource stocks tumbling across the world. The price of copper fell 1.3%.
BHP Billiton lost 67c, or 1.6% to $40.18 and Rio Tinto fell $1.49, or 2.1% to $71.11. Their stocks in London shed 2.8% and 3.8% respectively.
Fortescue dropped 10c to $4.20 after the nation’s third largest iron ore producer said it would not fund another railway line in the Pilbara and that third parties would be allowed access to BHP and Rio’s rail tracks.
The Materials and Resourcs sector lost 1.4%.
Sims Metal was halted after announcing it would tap the market for up to $475m. The metal recycler also reaffirmed guidance.
Another rise in the price of gold prevented gold stocks from losing ground. Newcrest added 3c to $36.04 and Lihir was flat.
The Energy sector weakened 0.9% with most stocks trading just below the gain line. Crude futures dropped 2.7% overnight.
Woodside lost 87c to $49.23 as the company revealed the cost of its Pluto project are 6% to 10% higher than originally anticipated.
Aquila fell 2.9% to $8.33 to lose some of the heavy gains made recently.
Industrials struggled, with the majors leading the sector 1.6% lower.
Brambles lost 17c, or 2.5% to $6.59 after featuring heavily in broker reports this morning. Citigroup upgraded its rating on the stock to “hold”, while UBS cut its target price by close to 5%.
Leighton fell 2.6% to $36.23 and Downer EDI dropped 3.9% to $8.52.
Goodman Fielder weakened 1% to $1.54 after a deadline on its sales process passed without a formal agreement meaning it is expected to sell its commercial oils and fats business for less than book value.
The Consumer Discretionary sector slid 1.2%, with retailers and gamers taking the most points off the index.
David Jones and Harvey Norman fell 12c and 8c to $5.61 and $4.27 respectively. Billabong bucked the trend adding 13c to $10.28.
Aristocrat sank 5.5% to $4.31, while Crown weakened 18c to $18.06.
Reports have surfaced that Tabcorp is in discussions to acquire Wesfarmers’ pub business as part of a diversification strategy. Tabcorp’s shares were 1.5% lower at $7.22.
Wesfarmers edged 8c below the line to $29.11 as the Consumer Staples sector dipped 0.2%.
Woolworths lost 24c to $28.06.
A 36c, or 2.8% drop to $12.33 from sector heavyweight Westfield led Property Trusts 1.6% into negative territory.
Around the region, the Nikkei 225 lost 47.7 to 9,501.8, while the Straits Times Index slid 7.6 to 2,751.2. Across the Tasman, the NZSE50 shed 24.7 to 3,116.5.
Spot gold was trading at US$1,142.19 per ounce, and the Aussie was buying US$0.9200.
North American arrivals surge
Traffic at Sydney Airport increased 6.1% in the month of October from the previous corresponding period, however the European peers in MAP Group's portfolio reported a decline in traffic proving that the economic recovery in Europe still has a long way to go.
At lunch, Macquarie Airports shares were down 5c to $2.76.
MMG US subsidiary enters forbearance agreement
Macquarie Media said its American Consolidated Media LLC (“ACM”) subsidiary has entered into a forbearance agreement with its lenders. Late last month MMG announced that ACM had breached certain covenants under its US$133.7m business level bank facility.
Half way through the day, Macquarie Media shares were down 1c to $2.10.
Arrow to focus on Fishermans Landing
Arrow Energy said, in regards to its FY10 outlook, it would focus its efforts on an enhanced exploration and appraisal program and the targeted FID on the Fisherman’s Landing project in March 2010. The company added that it expected continued increases in gas production and electricity sales during the year.
At noon, Arrow Energy shares were down 8c to $4.14.
Sims to tap market for $475m
Sims Metal Management announced a proposal to raise about $400 million in capital via a fully underwritten placement. The metal recycler also said it planned to raise $75 million through a share purchase plan (“SPP”).
Sims Metal Management shares were halted at $22.20.
Adelaide Brighton reaffirms guidance
Adelaide Brighton said, at this morning’s AGM, that net profit after tax guidance for the year ended 31 December 2009 would be in the range of $105 million to $115 million, in line with previous forecasts. The cement maker reported a net profit for the previous corresponding period of $120.8 million.
At noon, Adelaide Brighton shares were down 5c to $2.63.
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