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Markets Live: ASX gives back gains

Australian shares close lower after Wall Street eased on fiscal cliff concerns but Europe gained after EU finance ministers reached agreement on further assistance for Greece.

5.13pm: That's all from us here at Markets Live, thanks for being with us, we hope to see you tomorrow from 9.30am.

Click here for a full wrap of today's session.

4.24pm: Blue chip stocks were mixed today, but with the major miners posting losses, the ASX was always on the back foot.

  • BHP: -0.6%
  • Rio: -1.9%
  • ANZ: flat
  • CBA: -0.41%
  • NAB: +0.2%
  • Westpac: +0.6%
  • Fortescue: -1.3%
  • Woolworths: +0.8%
  • Wesfarmers: +0.8%
  • Telstra: +0.9%

4.16pm: Among the sectors, materials fell 1.1 per cent, gold miners lost 1.8 per cent and energy pushed down 0.8 per cent. Telecommunications and health bucked the trend, adding 0.9 and 0.8 per cent respectively.

4.12pm: The market has closed modestly lower, the benchmark S&P/ASX200 slipped 9.5 points, or 0.2 per cent, to 4447.3, while the broader All Ords dropped 10.8 points, or 0.2 per cent to 4462.6.

3.51pm: Shares in Malaysian Airline System (MAS) tumbled more than 20 per cent to an all-time low as the national carrier's 3.1 billion ringgit rights issue plan triggered fears of share dilution and uncertainty over the move.

Ahmad Jauhari, chief executive of Malaysia's national carrier, said in a statement to the stock exchange late on Tuesday that the rights issue was aimed at paying capital and debt expenses, without specifying the number of shares or the price for the issuance.

The share plunge came despite the carrier swinging to a profit of 37.1 million ringgit in the third quarter, reversing a loss of 477.6 million ringgit in the same quarter a year earlier. The struggling carrier posted a small operating profit of 4 million ringgit, ending six quarters of losses.

3.32pm: The global climate talks are underway in Doha, Qatar. Here's how Bloomberg New Energy Finance sums up the international market for carbon and renewable energy in the run up to the summit.

Click here for the full story.

3.25pm: Here's a snapshot of how markets around the region are performing:

  • Nikkei(Japan): -0.8%
  • Shanghai: -0.7%
  • Taiwan: -0.2%
  • South Korea: -0.9%
  • Singapore: -0.3%
  • New Zealand: +0.1%

3.05pm: Cabcharge has vowed to fight any plans to cut taxi fare surcharges.

Executive chairman Reg Kermode took aim at the Reserve Bank of Australia (RBA) and former Australian Competition and Consumer Commission chairman Allan Fels as the company faces a challenge to its 10 per cent surcharge regime.

‘‘This company does not intend to provide services to Visa and MasterCard at a cost to Cabcharge,’’ he told the company’s annual general meeting in Sydney on Wednesday.

‘‘Suggestions that our industry could survive on five per cent, because of some as yet unaccepted draft report to the Victorian government on the Victorian taxi industry, are not realistic and are likely to be met with significant resistance.’’

2.54pm: Nufarm will avoid a lengthy trial next year after settling a shareholder class action for $46.6 million.

The shareholders alleged Nufarm’s 2010 profit forecast was excessively positive and misleading. 

By settling the matter Nufarm avoids drawn out legal action and does not admit any fault. The money will be split among shareholders. 

Justice John Middleton of the Federal Court in Melbourne approved the settlement on Wednesday morning. 

Nufarm’s shares are trading 4 cents lower at $5.69. 

2.43pm: Here's something interesting from the small business desk, now it's the time of day to dream about making a flipping fortune. It happens. Here, two start-up experts tell how to get your business snapped up for big bucks.

Click here for the full story.

2.35pm: The Australian dollar has become a matter of 'heads I win, tails you lose' with the you being Australian exporters, writes BusinessDay's Michael Pascoe.

Bad global news provides a reason for the Aussie to remain strong and good global news provides a reason for it to get stronger.

The bottom line is that our dollar remains elevated and there's nothing much that can be done about it. Thus wise managements have simply got on with the business of adapting to the reality of a strong currency, leaving the whingeing and complaining to those with the time for pointless pursuits.

At this stage it would be a little cruel to point out all the people who were bravely and foolishly forecasting the Aussie would be sliding below parity now, so as there's not a fly handy to have its wings removed, let's just finger a few who stuck their heads up back in July. NAB at that stage was briefly enjoying a spell of reasonably successful currency guessing, but it tempted fate by predicting we'd fall below parity for Christmas and they were not alone.

Click here for the full story.

2.18pm: Australia is the second-best country in the world to be born in 2013, a study says.

The ‘‘lucky country’’ scored 8.12 out of a possible 10 points, just 0.1 behind Switzerland, The Economist’s Intelligence Unit said in their where-to-be-born index released last week. Following closely behind were Nordic states Norway, Sweden and Denmark. New Zealand was ranked seventh with a score of 7.95, while Nigeria came in 80th and last with 4.74 points.

The magazine said the list, the first since 1988, was compiled using a combination of surveys - where people said how happy they are - with objective determinants about the quality of life in these states.

2.09pm: Treasurer Wayne Swan says record levels of committed investment in resource and energy projects is a resounding vote of confidence in the Australian economy.

Government agency, the Bureau of Resources and Energy Economics (BREE), said in a semi-annual report on Wednesday that resource and energy projects at the committed stage stood at a record $268.4 billion as October.

Mr Swan said even on the most conservative estimate provided by BREE, the total potential investment in the sector sits at a mammoth $650 billion.

1.50pm: Former prime minister Paul Keating says most of the people piling into self-managed superannuation do not have the savings or expertise to ensure they will be provided for in retirement.

Mr Keating also says the ‘‘promise’’ of superannuation is no longer about retirement lifestyle but instead must be about managing old age and disability as Australians live longer.

The former Labor treasurer and prime minister, responsible for the introduction of Australia’s compulsory superannuation system, gave the opening address at the Association of Superannuation Funds of Australia (ASFA) conference.

Mr Keating said Australia faced an unsustainable health burden from its ageing population, and one option to meet that burden would be lifting superannuation contributions to 15 per cent, with the additional three per cent to go towards meeting health costs and aged care.

1.42pm: Jetset Travelworld expects a flat first-half profit as Australia’s leisure market struggles with soft retail prices.

Chairman Tom Dery has told the company’s annual general meeting the group’s travel management business, QBT, had experienced a reduction in total transactions in the four months to October 31 as government agencies reduced their travel spending.

Jetset’s transaction levels for the first half of 2012-13 are expected to be 10 per cent below where they were during the corresponding period in 2011-12.

But, Mr Dery said, this would be partly offset by a nine per cent reduction in costs from a redundancy program announced in June.

1.29pm: Fairfax's Peter Martin on Abbott's jobs target:

1.17pm: The gripes continue to flood in for this year's Worst Customer Service Awards, the annual showcase of Australian companies that wasted your time and money with appalling service. If you've got something to add, click here.

1.02pm: Here's a view on the JB Hi-Fi news:

12.49am: Aussie stocks now moving into fresh lows for the day. The ASX200 is 0.53 per cent lower to 4433, down 23.8 points on yesterday. 

12.44pm: In other data out today, committed investment in the resources sector has reached a new record of $268 billion, helped by a wave of multibillion-dollar liquefied natural gas projects, official figure show.

However, further growth in the investment pipeline is under threat from a double whammy of falling commodity prices and rising costs, the Bureau of Resources and Energy Economics says.

New figures published today said there were 87 major projects worth a collective $268 billion that had been given the green light to proceed, up from $260 billion in April.

12.40pm: Government spending cuts are having a negative impact on the construction sector, official figures show.

Total construction work done rose 1.7 per cent in the September quarter, figures released by the Australian Bureau of Statistics show. That was despite a 7.3 per cent fall in public sector construction work.

JP Morgan economist Tom Kennedy said the figures showed government spending cuts were weighing on the construction sector.

‘‘It looks like the weakness has once again been on the public side of things and that is not really surprising given the fiscal objectives of both federal and state governments,’’ he said.

12.35pm: Reg Kermonde has been safely re-elected as chairman and CEO of Cabcharge. 

11.58am: Japanese shares are down too, with the Nikkei 225 Stock Average poised to halt a four-day rally. The Nikkei 225 slid as much as 0.4 per cent to 9383.20 after yesterday closing at the highest level since April. 

11.50amThe Australian dollar remains lower following a decline yesterday amid speculation a report tomorrow will show a slowdown in capital expenditure growth, damping the outlook for the economy and the currency. It is currently trading at $US1.044 after falling after falling 0.2 per cent yesterday to $US1.0446.

‘‘If non-mining capital investment doesn’t show signs of picking up in 2013, that suggests that policy needs to be easier and that would be consistent with a rate cut next month’’ from the RBA, said Andrew Salter, a currency strategist at ANZ.

‘‘It might weigh on the currency in the very short-term.’’

11.37am: Following that cautiously optimistic outlook from OrotonGroup, here’s another item something from the small business desk. Amid the fanfare of global arrivals such as Zara and Topshop, fashion retailers that clothed baby boomers and Gen Xers now have a bleak future unless they both downsize and reposition, writes retail analyst Michael Baker.

11.29pmFashion retailer OrotonGroup says its sales are up so far this financial year and it is cautiously optimistic about the upcoming Christmas period.

Chief executive Sally Macdonald said sales in the 17 weeks since the end of July were up seven per cent from the same period in the previous year, on a like-for-like basis.

The company was somewhat confident ahead of the crucial Christmas season, as it could control its prices and promotional schedule, she told OrotonGroup’s annual general meeting.

‘‘Coupled with our focus on data and customer analysis, we are cautiously optimistic about the upcoming Christmas and Chinese New Year trading period,’’ Ms Macdonald said.

11.16am: The big banks are travelling better than the miners, but they're mostly in the red:

  • CBA is 0.3% lower to $59.04
  • ANZ is 0.29% lower to $23.74
  • NAB is 0.34% lower to $23.75
  • Westpac is 0.8% higher to $24.91

11.09am: The big miners are helping to drag markets lower this morning. Losses on the ASX200 have now slipped past -0.5 per cent.

  • BHP is 1.08% lower to $33.83
  • Rio is 2.22% lower to $56.5
  • Fortescue is 0.65% lower to $3.82

10.57am: Lonsec private client adviser Michael Heffernan said local market players took their cues from a disappointing night on Wall Street at the start of the Australian trading day.

‘‘I think largely we are following what happened overseas,’’ Mr Heffernan said, adding that some investors may have chosen to take profits following the strong performance of the local bourse yesterday.

10.52am: We'll have an article ready to go shortly, but in the meantime here's a bit more on the JB Hi Fi news. This is from the ASX release:

JB Hi-Fi Limited today announces the launch of JB HI-FI “HOME” concept stores. These stores will range all of the products that customers love from JB Hi-Fi plus “HOME”, signifying a full range of whitegoods, cooking and small appliances.

Initially, these home entertainment and appliance super stores will be located at theCompany’s existing larger homemaker centre sites where it sees “HOME” as a logical extension to its currententertainment categories.

Whilst confident on the success that can be achieved with these new concept stores, the Company will initially conduct a low risk and measured trial in Queensland with the initial conversion of four homemaker centre stores.

Two more stores will follow in the New Year. This localised trial will give the Company the ability to not only test the “HOME” concept but to also ensure that it does not impact the strong customer engagement that exists with the traditional JB Hi-Fi stores.

10.43am: Shares in Leighton are down 2.8 per cent, or 50 cents, to $17.05 after subsidiary Thiess won two contracts worth $220 million for work on a Queensland coal mine being built by the BHP Billiton Mitsubishi Alliance.

Thiess will construct a coal handling and preparation plant plus a rail loop and holding roads at the Caval Ridge mine project in the Bowen Basin, it said.

10.39am: JB Hi Fi shares are down sharply after the retailer announced it would trial an expansion of its range into white goods. Its shares have lost 7.1 per cent, 76 cents, to $9.93. The loss marks a bit of a setback for the share price, which has been recovering slowly after hitting a 52-week low in late June of $7.83.

10.34am: In case you missed it, the OECD has issued a glum outlook for the Australian economy for next year. According to the OECD, we’ll perform "slightly below potential" over the next two years as global growth looks set to for a sharp slowdown and the eurozone debt crisis "remains the greatest threat to the world economy at present".

Ivan Colhoun, the head of Australian economics and property research at ANZ, said the OECD did not commonly explicitly forecast interest rate cuts, as it did with Australia in this report."I notice they are forecasting a rate cut in December and early next year. That’s probably the most interesting aspect of their forecast I think," he said.

"[But] the Reserve Bank has effectively said that as well in its recent minutes. It’s been saying that the likelihood is that they are going to have to ease further."

Mr Colhoun said the OECD's report typically reflected the "official family" - Treasury and the RBA - view of the country. He added that the key questions for the Australian economy were about when the mining boom peaks, how much it slows after peaking, and whether other sectors of the economy pick up sufficiently to off-set or balance the slower mining investment story.

10.28am: Losses on the ASX200 have now hit 0.4 per cent, taking out more than half of yesterday's gain. 

10.25am: It's a sea of red among blue chips:

  • BHP: -1%
  • Rio: -1.83%
  • CBA: -0.27%
  • NAB: -0.34%
  • QBE: -0.73%
  • Newcrest: -1.43%
  • Woolworths: -0.28%
  • Harvey Norman: -0.41%
  • DJs: -2.02%

10.20am: Here are some of the companies pushing the ASX200 lower in early trade:

  • NRW Holdings: -13.06%
  • JB Hi Fi: -4.58%
  • Intrepid Mines: -4.48%
  • Perseus: -2.87%
  • Leighton: -2.51%

10.17am: Health stocks are higher, up 0.25 per cent, closely followed by info tech stocks, up 0.21 per cent. But most sub indexes on the ASX200 are down:

  • Materials: -0.79%
  • Industrials: -0.5%
  • Energy: -0.25%
  • Consumer disc.: -0.24%

10.15am: The Australian share market has opened a third of a per cent lower. The benchmark S&P/ASX200 index was down 16.2  points, or 0.36 per cent, at 4,440.6, while the broader All Ordinaries index was down 15.5 points, or 0.35 per cent, at 4,457.9.

On the ASX 24, the December share price index futures contract was down 20 points at 4,453, with 5,879 contracts traded.

10.13am: Some analyst rating changes for today:

  • CSL raised to buy at Normura
  • ALS raised to buy at Bank of America-Merrill Lynch
  • Shopping Centres Australasia rated new neutral at UBS
  • Mirvac raised to buy from neutral at Goldman Sachs

10.11am: An early one from the small biz desk: Being open to change is important for every business, but imagine having to design your products by guesswork.

In September, while thousands of people were queuing outside Apple stores awaiting the release of the iPhone 5, the Sydney-based founders of STM Bags, Adina Jacobs and Ethan Nyholm, had a bit more to worry about than elbowing through their ways through the store's large glass doors.

10.09am: In local corporate news this morning, poker machine maker Aristocrat Leisure’s profit has more than doubled and the company expects further growth as it releases new gaming products.

Aristocrat made a net profit of $45.5 million in the nine months to September 30, up from $19.9 million in the previous corresponding period.

The company has reported a nine-month profit as it has moved the end of its financial year from December 31 to September 30. Aristocrat said the profit growth was driven by its efforts to improve efficiencies, illustrated by a 76 per cent rise in earnings from the previous corresponding period, on 30 per cent revenue growth.

10.06am: Early take - Stocks are down about 0.2 per cent as markets open. 

9.59am: For a comprehensive look at this morning’s business news, check today’s need2know. Here are this morning’s key market links:

  • The SPI was points 11 points lower 4462
  • The $A was trading at $US1.0442
  • In late trade, the S&P500 added 0.04% to 1406.80
  • In Europe, the FTSE100 added 0.22% to 5799.71
  • China iron ore lost 30 US cents to $US117.90 a metric tonne
  • Gold lost 0.2% at $US1745.06 an ounce
  • WTI crude oil lost 15 US cents to $US87.59 a barrel
  • RJ/CRB commodities index lost 0.44% to 297.74

9.57am: Good morning folks. Welcome to the Markets Live blog for Wednesday. Apols for the late start, but we're here now!

Contributors: Thomas Hunter, Richard Hughes, Max Mason

This blog is not intended as investment advice

BusinessDay with agencies


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