Shares tumble 3.3% by lunch
The Australian sharemarket had lost 3.3% by lunch Monday after a weak lead from Wall Street on the back of new concerns regarding Europe’s debt crisis. The six biggest stocks on the indices were between 3.4% and 4.1% lower.
The local currency also took a battering, to be just above 81c against the greenback.
In economic news, the Australian Industry Group/Housing Industry Association Performance of Construction Index dropped 2.6 points to 53.2 in May. It was, however, the third consecutive month the index was above the 50-point level that separates expansion from contraction.
At noon, the All Ords lost 144.0 to 4,328.4, while the ASX/200 shed 146.7 to 4,302.7. Around 830 million shares worth around $1.9 billion had changed hands.
NAB fell 95c, or 3.9% to $23.41 amid reports the bank has abandoned its bid for 318 Royal Bank of Scotland branches in Britain.
The company announced this morning that subsidiary Great Western Bank announced the acquisition of certain assets and liabilities of TierOne Bank from the Federal Deposit Insurance Corporation for US$76 million.
ANZ, Westpac and CBA were between 3.4% and 3.9% in the red as the Banks and Financials sector weakened 3.7%.
Investment bank Macquarie dropped $2.25, or 5.1% to $42.00, while insurers AMP and AXA Asia Pacific fell 5.2% and 4.7% to $5.50 and $5.70 respectively.
Westfield led the Property Trust sector to also be 3.7% lower, with a 51c fall to $12.36.
Lend Lease and Goodman Group were down 5.5% and 5.2%.
Metals prices fell in London as disappointing jobs data out of the US added further fuel to concerns investors already had about the global economy. Copper hit its lowest level in eight months.
BHP Billiton and Rio Tinto retreated 4% and 4.1% to $36.37 and $64.79. The Materials and Resources sector was down 3.6%.
Losses were widespread throughout the sub-sectors. Iron ore miner Fortescue slumped 22c, or 5.3% to $3.93, while metals recycler Sims and steelmaker Bluescope shed 4.7% and 4.8% to $18.28 and $2.17.
Chemicals and explosives company Incitec and building materials companies Boral and James Hardie were between 4.5% and 4.8% below the gain line.
A rise in the price of gold saw Newcrest and Lihir outperform to be barely changed at midday.
The Energy sector tracked the price of crude lower by slumping 4%.
Woodside and Santos were both down 3.6% to be trading at $42.41 and $12.45.
Oil Search fell 24c, or 4.2% to $5.42, however the heaviest losses were among smaller coal related stocks such as Riversdale, Centennial and Aquila which were over 5% lower.
Caltex Australia dropped 56c, or 5.2% to $10.25.
Brambles slumped 4.8% to $6.18 as the company confirmed media speculation, saying that US customer ConAgra had advised CHEP Americas late last week that it was moving its pallets business to another provider.
Leighton lost 88c, or 2.8% to $30.91 as the Industrials sector retreated 3.3%.
Seek, Boart Longyear and ConnectEast dropped between 5.1% and 6.1%.
Wesfarmers retreated 78c, or 2.7% to $28.31 in a Consumer Staples sector that was down 1.8%.
Like every sector, Consumer Discretionary suffered broad base losses as the sector weakened 3.4%.
Billabong shed 35c to $9.40 as both Credit Suisse and Goldman Sachs JBWere reiterated their ratings on the surfwear retailer. However, the former did reduce its target price on the stock.
Wotif.com continued its recent heavy sell-off to be down 5.2% to $4.91. The stock was trading at about $8.00 less than two months ago.
Flight Centre sank 6.2% to $16.75, while media companies Ten and Fairfax shed 4.2% and 4.3%.
Around the region, the Nikkei 225 dropped 369.4 to 9,531.8, while the NZSE50 was closed. The Straits Times Index retreated 61.0 to 2,745.5.
Spot gold was trading at US$1,217.63 per ounce, while the Aussie was buying US$0.8105.
Construction activity expands for third month
The Australian Industry Group/Housing Industry Association Performance of Construction Index dropped 2.6 points to 53.2 in May. It was, however, the third consecutive month the index was above the 50-point level that separates expansion from contraction.
Sedgman awarded $80m contract
Sedgman said it has signed a construction contract worth approximately $80 million for the Benga coal handling and preparation plant (CHPP) in Mozambique, taking the total value of work awarded to the company at the project to over $143 million. The resource sector services company said the project is being developed by Riversdale Mining Ltd (RIV) and its partner Tata Steel Limited in Mozambique’s Moatize basin through their jointly owned entity, Riversdale Mozambique Limitada (“RML”).
Half way through the day, Sedgman shares were down 1c to $1.275.
Brambles loses key US customer
Brambles confirmed media speculation, saying that US customer ConAgra had advised CHEP Americas late last week that it was moving its pallets business to another provider. Brambles however said the move would have material impact on its FY10 results.
At noon, Brambles shares were trading down 32c to $6.17.
NAB acquires TierOne assets and liabilities
National Australia Bank subsidiary Great Western Bank (“GWB”) announced the acquisition of certain assets and liabilities of TierOne Bank from the Federal Deposit Insurance Corporation (FDIC) for US$76 million. The company said the acquisition includes all of TierOne’s approximately US$1.9 billion in deposits and US$1.9 billion in loans under an agreement where the FDIC absorbs 80% of credit losses arising on the loan portfolio and related assets.
Half way through the day, NAB shares were trading down 84c to $23.54
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