Australian stocks end lower, pulled down by the big miners as enthusiasm over monetary easing fades.

5.15pm: That's it for today - thanks everyone for reading this blog and posting your comments.

Here's our evening wrap of today's session.

4.36pm: The dollar was under pressure most of the day too, and is currently buying $US1.0422.

Weighing on risk sentiment were weak Asian stocks and uncertainty about Spain, the new epicentre of the debt crisis after Greece, Ireland and Portugal.

Investors were still waiting to see whether the Iberian nation would ask for a bailout and activate the European Central Bank's new bond-buying program.

"It's an important week in Europe ... and markets may be anticipating a risk-off outcome and hedging their bets," said Alvin Pontoh, a strategist at TD Securities in Singapore.

That said, should Spain ask for assistance, Pontoh said, it would give a boost to risk assets such as the Aussie dollar.

"But until that happens, markets are cautious."

4.22pm: Here's how the blue chips performed today:

  • BHP: -0.9%
  • Rio: -2.4%
  • ANZ: -0.6%
  • CBA: -0.1%
  • NAB: +0.4%
  • Westpac: -0.2%
  • Fortescue: -0.3%
  • Woolies: -0.1%
  • Wesfarmers: -0.5%
  • Telstra: -0.3%
  • Newcrest: -2.6% (ex-dividend)

4.19pm: European stock index futures are pointing to a lower open, with stocks set to reverse the previous session's rise and track losses in Asia as brewing concerns over the outlook for global growth prompt investors to book a portion of recent lofty gains.

Futures for Euro STOXX 50, for Germany's DAX and for France's CAC were down 0.5-0.6 per cent.

Dow and S&P futures are down between 0.1 and 0.2 per cent, pointing to a slightly lower start on Wall Street.

4.16pm: Among the sectors, materials led the decline, falling 1.3 per cent, while energy lost 1 per cent and financials slipped 0.2 per cent.

Defensive sectors bucked the trend: health stocks rose 0.7 per cent and property trusts inched up 0.1 per cent.

4.13pm: The sharemarket has ended lower in a broad-based retreat. The benchmark S&P/ASX200 index fell 22.8 points, or 0.5 per cent, to 4385.5, while the broader All Ords lost 21.6 points, or 0.5 per cent, to 4409.2.

4.04pm: House prices continue to decline in most Australian capital cities, buyer sentiment remains generally soft and the stock of unsold homes remains near record highs, ANZ says:

  • However, market demand/supply fundamentals continue to tighten. Low vacancy rates are driving real rents higher and building activity remains well short of underlying housing demand.
  • After falling in recent years, house prices are showing tentative signs of reaching a floor in several capital cities, aided by recent interest rate cuts.
  • However, weakening state economic activity suggests prices in Hobart and Melbourne remain vulnerable.

3.55pm: The market regulator has slapped CommSec with a $50,000 fine for a series of misleading trades conducted in the second half of 2010 to early 2011.

The Australian Securities and Investments Commission said today that Commonwealth Bank-owned Commsec had paid $50,000 in order to comply with an infringement notice by its markets disciplinary panel for 48 trades that "that allegedly interfered with the efficiency and integrity of the ASX market".

ASIC said CommSec placed 48 trades of Oaks Hotels & Resorts Ltd shares that "involved no change in beneficial ownership and falsely represented 11.88 per cent on bona fide volume in (Oakes Hotels shares), creating the misleading appearance of active trading".

The trades occured between August 4, 2010 and January 20, 2011, which CommSec conducted on the account of its client.

3.43pm: A fairly inglorious performance from our mining stocks courtesy of declining commodity prices weighed heavily on the broader index to start the week, says CMC Markets trader Tim Waterer:

  • The ASX200 fell to the south side of the 4400 level with traders clearly struggling for reason to buy with the momentum gained from recent central bank stimulus seeming to have dissipated.
  • How commodity prices react to international economic data for the rest of the week could be instrumental in shaping Australian market direction given the concentration of materials stocks in the local index. 
  • Overall, traders appear to be devoid of reasons to buy higher yielding assets at this stage of proceeding until some evidence is forthcoming that recent stimulus efforts will start to bear fruit.

3.34pm:  Shareholders in PMP are unlikely to get a dividend in the short term as the printing and publishing business restructures and pays down debt.

PMP chairman Ian Fraser says the company is dealing with the structural changes in the media and print markets, with profits to be hit by ‘‘large significant items’’ in the current year.

PMP shares are flat at 25 cents.

2.58pm: As we approached the final hour of trade here in Australia, here's a look at how the region has performed:

  • Nikkei(Japan): -0.44%
  • Shanghai: +0.28%
  • Taiwan: +0.09%
  • South Korea: -0.2%
  • Singapore: -0.11%
  • New Zealand: +0.14%

2.48pm: Foxconn, a manufacturing partner of Apple - which helps build parts for the iPhone, has decided to close a factory in China’s Shanxi province after a fight among workers broke out last night.

The facility employs 79,000 people to make consumer electronics, components, and precision molding for devices including mobile phones.

A fight between rival worker groups at a dormitory operated by an outside company broke out at about 11 p.m. last night and escalated to involve as many as 2,000 people before security and police brought the situation under control by about 3am, a company spokesperson said.

Some workers were detained by police, he said without giving details.

2.36pm: It has been a quiet start, but this week has plenty of key events that could shape the market says Michael Pascoe.

Remember to turn off the auto-refresh at the top of this page before you watch the video.

2.24pm: Here's a look at some notable movers among the top 50 companies on the ASX, keep in mind there is a lot of profit-taking today:

2.11pm: Along with shares, the dollar has also recovered from the day's low at $US1.0398 and is currently trading at $US1.0435. But there are plenty of analysts predicting a fall in the currency over the mid term:

‘‘The Australian dollar is very expensive from whichever metrics you look at,’’ says Dagmar Dvorak, a director of fixed-income and currencies in London at Baring Asset Management.

‘‘When a currency overvaluation is that extreme, you have to question what could be a trigger that stops it. For the Aussie, it’s the economic slowdown in China and falling commodity prices. The currency looks vulnerable.’’

1.57pm: Suncorp boss Patrick Snowball received a 50 per cent pay rise in the 2011-12 financial year to $8.27 million.

It makes Snowball, an Oxford graduate who joined Suncorp in 2009, one of the highest paid chief executives in Australia.

The 62-year-old’s pay rise was largely due to the more generous terms of a new contract he signed in August 2011, plus a larger cash incentive as Suncorp posted a 60 per cent rise in its full year profit.

Here's the full story

1.39pm: NAB is the latest bank to say the RBA has turned more dovish, but doesn't expect a rate cut before November:

  • We have changed our forecast and now see the RBA moving to cut the cash rate again in the coming months, probably by a cumulative 50 basis points;
  • What has changed is that in recent weeks the RBA has signalled concern about the mix of the sustained drop in commodity and ongoing high AUD;
  • Other factors are tightening fiscal policy, ongoing weakness outside of mining (notably in residential housing and small business), and the medium term headwinds of the approaching end of investment boom in the resource sector; 
  • A rate cut as early as next month is possible, but in our judgement developments in recent weeks have been sufficiently positive for the RBA to retain a measured approach to any additional ease.
  • Our forecast now has a 25bps cut in November and then again in February, although actual timing will be data dependent.

Westpac revised its rates forecast Friday, saying many "reasons could be raised to justify a deterioration" in the RBA's outlook beyond the relative health of the labour market in Australia.

Westpac now "slightly favours" an October rate cut to be followed by a November rate cut and another in the first quarter of 2013, from an earlier call of rate cuts to resume in November.

1.29pm: The Commonwealth Bank has responded to reports on Fairfax’s 3AW radio station that it was looking at job cuts and branch closures.

3AW obtained documents from a private briefing made to a group of stockbrokers which hinted at the cost cutting moves.

CBA denied it had any plans for mass layoffs and said that 3AW had misinterpreted the presentation.

"In regard to the claims made by 3AW, the document referred to was released to the Australian Securities Exchange on Friday 21 September," a spokeswoman for CBA said.

"The Commonwealth Bank has no plans for large scale branch closures in the future, nor does it have any targeted figures for staff reductions," she said.

"Also, the Commonwealth Bank is the only major bank not to undertake any offshoring."

"In the presentation to Morgan Stanley that was referred to, the Bank’s representative stated that these were issues that had occurred in the industry in the past and that the Bank was taking a stand to the opposite - in that it had no intention of doing the same," she said.

1.13pm: Regional lender Bendigo and Adelaide Bank has become the latest to tap investors for funds, through the sale of $125 million worth hybrid shares.

The funds will mostly be used to redeem some $89 million worth of reset preference shares currently on issue, the bank said.

‘‘(Convertible Preference Shares) are being issued to support Bendigo’s balance sheet growth and to ensure Bendigo continues to have strong regulatory capital levels,’’ the bank said in a statement. Bendigo has left the door open to raise more under the offer.

1.10pm: BusinessDay's Adele Ferguson has filed: Directors sweating the outcome of pay votes.

With the AGM season just weeks away, directors of listed companies are having hot sweats about the reception of their remuneration reports among investors, particularly those companies which suffered a first strike last year.

There are 108 companies, including BlueScope Steel and Perpetual, suffering a "first strike" - a "no" vote of 25 per cent or more - against their remuneration reports last year.

While a number of CEOs and boards have opted to take pay cuts or defer their short term bonus, others have not, and could face some embarrassing headlines and headaches.

1.02pm: If you've got a few spare minutes over lunch, this Q and A video featuring entrepreneur Danny Almagor is well worth a look. Almagor founded the Australian arm of Engineers Without Borders and is now on a mission to improve the world one business at a time. Click here for a profile of Danny.

Remember to turn off the auto-refresh at the top of this page before you watch the video.

12.56pm: Resins maker Nuplex Industries will eliminate up to 80 jobs in a restructuring that will close four plants New Zealand and Australia over the next two years.

In Auckland Nuplex will shut its Onehunga site and its high-temperature plant at its Penrose site in Auckland.

In Australia, it will close sites at Canning Vale in Western Australia and Wangaratta in Victoria, the company said in a statement to the NZX today.

After the changes, production will be concentrated on three sites - Botany in New South Wales, Wacol in Queensland and the remaining facility at the Penrose, Auckland, site.

It will spend about $13 million upgrading the remaining plants.

Job losses will amount to ‘‘less than 10 per cent’’ of the 800 workers in Australia and New Zealand, split evenly across the two countries, said Sam Bastounas, Nuplex’s president for Australasia.

12.42pm: Speaking of the Australian dollar, it's also down against the yen. Here's a graph showing it's performance for the day:

12.31pm: Commonwealth Bank currency strategist Joseph Capurso attributes today's fall in the dollar to renewed demand for the US dollar.

‘‘Almost every currency is falling against the US dollar,’’ he says.

Capurso says the US dollar has probably been oversold in the past few weeks due to the Federal Reserve’s decision to introduce a third round of quantitative easing to support the American economy.

‘‘What I think we’re seeing is that overselling being wound back, so the US dollar is very strong against all-comers today.’’

12.26pm: More people are concerned over electricity prices than any other household expense, such as gas, telephone, internet, rent, mortgage, transport and the like, a survey by consumer group Choice has found.

The nationwide survey of 1020 households, conducted in June, found 55 per cent of respondents ‘'very’' concerned and another 30 per cent ‘'quite'’ concerned about their electricity bill.

Of those respondents who answered that electricity prices have risen in recent years, nearly 40 per cent said the main reason was energy companies raising prices to boost their profits.

As well, 23 per cent blamed the carbon price for boosting prices, even though the survey was conducted before the price had been introduced.

12.22pm: Local stocks are following regional markets down as enthusiasm over stimulus measures from global central banks wanes, analysts say:

"I think they're just moderating in the market," says Peter Esho, chief market analyst at City Index.

"I think it's just profit-taking on the market, regional indices are down, we're just soft in line with the rest of the region."

12.10pm: And while we're looking at other markets, here's how regional equities are doing:

  • Japan (Nikkei): -0.7%
  • Hong Kong: -0.85%
  • Shanghai: -1%
  • Taiwan: -0.5%
  • Korea: -1.1%
  • Singapore: -0.7%
  • New Zealand: flat

12.08pm: Meanwhile, spot gold has dropped more than 1 per cent to as low as $US1759.14 an ounce, retreating from a near-seven-month high of $US1787.20 hit in the previous session.

12.04pm: The oil price is also taking a hit, with WTI crude falling $US1.06 to $US91.83, while Brent is down $US1.02 at $US110.40 a barrel.

12.02pm: The dollar has just slipped below $US1.04 for the first time today, hitting $US1.0398.

11.57am: A reader has alerted us to an interesting graph in the IMF's recent Global House Price survey, showing that global house prices are still on a downward trend, with Australia's prices in Q2 down more than 5 per cent from last year's corresponding quarter:

11.51am: A couple of stocks are posting gains, with Westfield up 0.7% and CSL gaining 0.5%.

11.46am: Shares are falling across the board, with just about all blue chips in the red, but losses are still being led by the miners:

  • BHP: -1.2%
  • Rio: -2.5%
  • ANZ: -0.4%
  • CBA: -0.3%
  • NAB: -0.04%
  • Westpac: -0.4%
  • Fortescue: -1.4%
  • Woolies: -0.1%
  • Wesfarmers: -1.1%
  • Telstra: -0.3%
  • Qantas: -2.2%
  • Newcrest: -2.9% (ex-dividend)
  • Origin: -2.3%
  • Woodisde: -1.1%

11.28am: The dollar is also trading at the day's lows, around $US1.0411.

‘‘Aussie is seeing a bit of slippage on the possibility of the RBA cutting rates as early as October,’’ says Westpac strategist Imre Speizer.

‘‘Markets could remain confined for a while. What could move markets would be some friction news on the Greek-troika inspections,’’ he says, referring to the group made up of the International Monetary Fund, the European Central Bank and the European Commission.

Interest rate futures are factoring in an about 60 per cent chance of a rate cut at the RBA's October meeting next week.

11.24am: Treasurer Wayne Swan has reaffirmed his commitment to bring the budget to surplus this year, despite the falling tax intake.

  • While the decline in commodity prices in recent months will, inevitably, make it more difficult to return the budget to surplus in 2012-13, the government remains committed to doing so.
  • Plus, we have that great combination - solid growth, low unemployment, contained inflation and a record investment pipeline - and we continue to outperform just about every other developed economy.

But the treasurer also said the lingering impact of the GFC was still apparent:

  • In particular, tax receipts are still well down on pre-crisis levels.
  • Nevertheless, our fiscal position remains in very good shape.

11.19am: The ASX200 has hit the day's lows, down 0.6 per cent. Materials stocks are leading the losses, falling 1.3 per cent, followed by the energy sector, down 1.2 per cent. Financials have slipped 0.2 per cent.

Health and property trusts are the only sectors posting gains, up 0.2 and 0.5 per cent respectively.

11.15am: Xstrata has delayed its response to a 21.6 billion-pound takeover bid by Glencore International  to resolve issues over management and the board at the new company, Bloomberg says citing unnamed people familiar with the situation.

The surprise delay to a response due today buys time for the two sides to determine who will take a seat on the combined board vacated by Xstrata chief executive Mick Davis, said the people, who asked not to be identified as the talks are private.

‘‘They are clearly struggling,’’ says Charles Newsome, director at Investec. ‘‘It’s a difficult deal for them to pull off because of the way it is structured. I’ve been quite uncomfortable with this all the way along.’

’Xstrata is now due to respond to Glencore’s revised all-share proposal by October 1, Xstrata said yesterday. The companies jointly sought the extension, according to the statement.

‘‘To simply drag it out another week adds yet more opacity to an already pretty murky situation,’’ says Paul Gait, an analyst at Sanford C. Bernstein.

11.03am: Nufarm shares are down 0.7 per cent, a little behind the market, after announcing it had returned to full year profitability despite one-off costs from legal action and restructuring. It's shares were down 4 cents to $5.81 in recent trade.

As we noted earlier, the company incurred one-off costs of $42.8 million in the year to July, compared to costs of $148.1 million in the previous 12 months. The major item on Nufarm’s books for the year was $30.4 million in costs from its settlement of legal action brought against it by shareholders.

10.59am: Looking at why the market has started the week in a negative mood, Macquarie Private Wealth division director Lucinda Chan said the growing expectation Spain would soon seek a bailout package was one factor.

‘‘That’s probably what’s holding the market back a bit,’’ Ms Chan said. ‘‘Sentiment is a bit cautionary, a bit hesitant.’’

10.54am: The gold sub index is down sharply as we approach 11am - down 1.4 per cent.

Newcrest is down 2.65 per cent, St Barbara is down 2.37 per cent, Oceanagold is down 2.3 per cent and Kingsgate Consolidated shares are down 2.13 per cent.

10.51am: Stocks have bounced off their early low but remain 0.4 per cent lower. The big miners have had a rocky start to the week:

  • BHP is 0.77% lower to $33.44
  • Rio is 1.62%% lower to $55.42
  • Fortescue is 2.22% lower to $3.53

10.42am: Here are the biggest losers on the ASX200 in early trade:

  • Intrepid Mines: -8.74%
  • NRW Holdings: -5.13%
  • Myer Hodlings: -4.53%
  • Discovery Metals: -3.53%
  • Atlas Iron: -3.5%
  • Pacific Brands: -3.25%

10.37am: Treasurer Wayne Swan has recommitted the federal government to delivering a budget surplus next year.

The federal budget ended with a slightly smaller than expected deficit in the last financial year. The final underlying cash deficit for 2011/12 was $43.7 billion, the government announced.

The outcome compares to the May budget forecast for a deficit of $44.4 billion, and a deficit of $47.7 billion in 2010/11.

10.34am: Now for a more comnpehensive look at the early winners on the ASX200:

  • Gryphon Minerals: +9.1%
  • Alacer Gold: +3.57%
  • APN News & Media: +3.13%
  • Linc Energy: +2.11%
  • FKP Property: +2.08%
  • Macmahon Holdings: +1.64%

10.29am: Treasurer Wayne Swan and Finance Minister Penny Wong are about to deliver the final budget outcome for 2011/12. You can watch it here.

10.25am: Here's how the various sub indices on the ASX200 are performing in early trade. Most are down, and those which are up are not strongly higher:

  • Consumer disc.: -0.93%
  • Materials: -0.87%
  • Industrials: -0.68%
  • Energy: -0.61%
  • Utilities: -0.56%
  • Health: +0.14%
  • Info tech: +0.1

10.21am: Although markets are down in defiance of the weak leads going into today's session, here's a comment from reader 'JJ' which points to a dark cloud on the horizon:

If you're looking for events that may spook the market, a post at Forexlive.com says a couple of Chinese marine surveillance ships entered Japanese waters near those islands both countries are disputing ownership of.

10.15am: A quick look at the early winners and losers on the ASX200:

  • Gryphon Minerals: +11.4%
  • Alacer Gold: +3.9%
  • Boart Longyear: +2.2%
  • Intrepid Mines: -11.7%
  • NRW Holdings: -4.7%
  • Atlas Iron: -3.5%

10.10am: The benchmark S&P/ASX200 index is down 19.1  points, or 0.43 per cent, at 4389.2, while the broader All Ordinaries index is down 17.3 points, or 0.39 per cent, at 4413.5.

On the ASX 24, the December share price index futures contract was DOWN 14 points at 4,396, with 5,797 contracts traded.

10.05am: Early take - shares down slightly. Markets have lost about 0.1 per cent in opening trade.

9.55am: Australian bond futures prices are higher following a quiet weekend of economic news. RBC Capital fixed income strategist Michael Turner said local bond futures prices moved little during Saturday and Sunday.

‘‘There hasn’t been too much news over the weekend, so we’ve opened up about where we were on Friday night,’’ he said.

Mr Turner said there was unlikely to be significant movement in bond prices during Monday, due to a lack of local economic data releases.

At 8.30am AEST, the December 10-year bond futures contract was trading at 96.835 (implying a yield of 3.165 per cent) up from at 96.800 (3.200 per cent) on Friday. The December three-year bond futures contract was at 97.430 (2.570 per cent) up from 97.410 (2.590 per cent).

9.49am: A quick look at commodities. Gold rose to within a whisker of its 2012 high on Friday as technical momentum and recent stimulus efforts by major central banks around the world prompted bullion investors to boost bullish bets.

Bullion priced in euro terms hit a record high earlier in the session, but gains were later pared by profit taking. The metal posted a slim gain for the week for its fifth consecutive weekly rise.

The China iron ore price slipped to end last week, losing $US2.70 to $US106.40. The big miners also lost ground on Wall Street, with BHP losing 0.29 per cent and Rio closing down 1.81 per cent.

9.45am: Agricultural chemicals maker Nufarm has returned to full year profitability despite one-off costs from legal action and restructuring.

The maker of herbicides and pesticides has forecast an improved underlying performance in the year ahead.

Nufarm made a net profit of $72.6 million in the year to July 31, up from a loss of $49.9 million in the previous year. The company incurred one-off costs of $42.8 million in the year to July, compared to costs of $148.1 million in the previous 12 months.

The major item on Nufarm’s books for the year was $30.4 million in costs from its settlement of legal action brought against it by shareholders.

9.42am: On Thursday this week, the US gets economic growth data for the June quarter. A Bloomberg survey expects growth to be flat at 1.7 per cent, the same as the March quarter. Domestically, the number will be seen through a political prism as Barack Obama and Mitt Romney continue the presidential contest, but outside the US it will be watched for signs of recovery in the world’s biggest economy.

9.38am: Looking ahead to what's in store this week:

  • Tuesday: RBA financial stability review
  • Wednesday: Department of Workplace Relations internet skilled vacancies for August  
  • Thursday: ABS job vacancies for August
  • Friday: ABS private sector credit for August

9.35am: Lonsec Limited senior private client advisor Michael Heffernan says the market is likely to track sideways today in the absence of any surprises.

"We're being driven by inertia at the moment," he said. "There is no major impulse on the economic front today or certainly not from the corporate front. We're just meandering along until there is major corporate news."

Mr Heffernan said he did not think there was anything in prospect that would spook the market or supercharge it.

"This has been pretty typical of the market over the past six or so weeks. I think that's good, frankly, compared to this time last year when we were worried about falling over the cliff again."

9.32am: Everything points to a tame start to the week, with offshore markets putting in a mixed performance on Friday and very little from Europe, the US or Asia over the weekend to move stocks sharply higher or lower.

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

  • SPI futures are flat at 4410
  • The $A is lower at $US1.0449
  • In the US on Friday, the S&P500 fell 0.01% to 1460.15
  • In Europe, the FTSE100 fell 0.03% to 5852.62
  • Gold rose $7.80 to $US1778 an ounce
  • WTI crude oil rose 47 cents to $US92.89 a barrel
  • Reuters/Jefferies CRB index fell 2% to 314.46

9.30am: Hi everyone. Welcome to the Markets Live blog for Monday.

Contributors: Thomas Hunter, Peter Litras, Jens Meyer

This blog is not intended as investment advice

BusinessDay with agencies