Local stocks dived in a broad-based retreat, following a Wall Street slump on poor earnings results and European stocks diving on fears about a worsening Spanish recession.

5.05pm: That's all from us here at blog central, thank you for being with us, we'll be back tomorrow from 9.30am.

Click here to for a full wrap on today's session.

4.55pm: Today's losses were triggered by overseas events, while the rise in the local CPI didn't bother investors too much, analysts say.

"Unfortunately we [saw] a lot of selling occurring due to offshore factors, overnight we saw European markets hit six-week lows, real worries about Spain’s spiking borrowing costs impacting investor sentiment and US investors spooked by disappointing earnings," says CommSec analyst Juliette Saly.

"Adding to the downbeat mood, we had ratings agency Moody’s downgrading five Spanish regions. None of that has really helped out sentiment today."

4.38pm: The Australian dollar has jumped half of a cent against the US dollar as a sharp rise in domestic inflation and firmer Chinese data prompted markets to pare expectations on the speed and scale of further rate cuts.

The Aussie jumped to a high of US$1.0318, from $US1.0260 in early trade, so recovering losses suffered overnight when a drop on Wall Street spooked investors. It was last trading at $US1.0312.

Much of the gains came after the HSBC China Flash PMI rose to a three-month high of 49.1 in October, tempering worries about a hard landing in the world's second largest economy.

The reading prompted markets to lengthen the odds of a cut in interest rates next month with interbank futures factoring in a 50/50 chance of an 25 basis point-easing to 3.0 per cent in November from 82 per cent this morning.

Yet, a move lower remains fully priced in by Christmas, in part because much of the jump in inflation was due to one-off government measures.

"The RBA (Reserve Bank of Australia) would probably still view the AUD as high relative to commodity prices and restraining activity and thus may retain an easing bias," says Greg Gibbs, a strategist at Royal Bank of Scotland in Singapore.

"However, with inflation no longer appearing low, and China appearing more stable, there is less excuse to cut further."

4.25pm: All sectors ended in the red, but losses were led by the energy and materials sectors, down 1.6 and 1.4 per cent respectively.

4.14pm: The sharemarket has closed near the day's lows. The benchmark S&P/ASX200 index fell 37.3 points, or 0.8 per cent, to 4505.8, while the broader All Ords lost 37.4 points, or 0.8 per cent, to 4530.6.

4.09pm: Sigma Pharmaceuticals will pay $57.5 million in costs after settling a class action brought by shareholders.

The case was brought against the owner of the Amcal and Guardian pharmacy chains in 2010 by shareholders seeking damages from alleged non-disclosures by Sigma.

If no more than half of the members of the class action are opposed to the settlement figure, the case against Sigma will be dismissed without admission of liability by the company.

Sigma shares are down 2.3 per cent.

3.50pm: Lend Lease has restructured the management of its Australian operations, months after after reporting irregularities were uncovered in the accounts of a subsidiary.

The company’s Australian operations, which account for more than 60 per cent of the group’s total earnings, have been split into two core divisions - construction and infrastructure, and property.

Current Lend Lease Australia chief executive Mark Menhinnitt will head construction and infrastructure, and Lend Lease’s head of investment strategy Tarun Gupta will head the property division.

3.40pm: First strike for Fairfax - the remuneration report has just been vote down, Clare Kermond reports from the AGM.

3.22pm: A senior Reserve Bank official says housing markets are not the biggest threat to financial stability, despite the economic turmoil unleashed by property busts in the United States and elsewhere.

In years following the global financial crisis, global debate has continued  to swirl about which economies could be vulnerable to a housing slump.

Australia’s property market has often been singled out by overseas commentators, with the Economist saying in August that houses here were more than 30 per cent overvalued when compared with rents and incomes.

3.06pm: The US Federal Reserve appears intent to stick to its bond-buying stimulus, having already indicated it would take more than a modest show of economic strength for policymakers to begin taking their foot off the gas.

The Fed unveiled a third round of bond purchases last month to try to rev up a sluggish economic recovery despite a looming presidential election that some thought might deter action.

Now analysts believe the central bank will wait until at least December to make any changes to its current plans to buy $40 billion of mortgage debt per month.

2.57pm: Treasurer Wayne Swan says inflation is still contained, despite being impacted by temporary one-off price increases in the September quarter.

‘‘Contrary to the campaign launched by the Liberal Party, there is nothing in today’s figures that suggest any evidence of a significant broad-based price increase due to the impact of the carbon price,’’ Mr Swan told reporters in Sydney.

2.35pm: And while we're at AGMs, here's some more from Billabong's current chairman Ted Kunkel directly after the AGM:

- On the board’s February rejection of a $3.30 offer from TPG: ‘‘Boards make decisions based on information theuy have at the time. The information we had at the time lead us to reject the offer on the basis that it didn’t reflect the appropriate premium that it should’ve at that time. You’re there to make decisions and we made that deicsion.’’

- On leaving with share price at a record low: ‘‘I don’t look at this personally. I’ve lead the company through some particularly turbulent times. We are all shareholders we all share that frustration.’’

- On a brighter note, when asked if the worst was behind Billabong: ‘‘Yes I’m optimistic going forward. We’re getting to a point where we are feeling a lot more comfortable’.

- On any further interest from potential buyers: ‘‘The board stands ready to engage with anyone who believes they can provide value to shareholders, we have made that quite plain’’

2.04pm: The Fairfax meeting is still going.

Chairman Roger Corbett has just confirmed Gina Rinehart's stake will be voted on the floor.

"She's not part of the proxy situation and I don't believe that stock has been voted."

Rinehart's friend, Jack Cowin, who is up for election, confirmed he discussed voting strategies with her before the meeting.

"Her decision rests with herself," he said.

1.55pm: An improved takeover bid for Arrium appears imminent, with Korean steel giant POSCO confirming overnight that it wanted to continue talks about a possible takeover.

POSCO teamed with commodities group Noble and several Korean pension funds earlier this month in a bid to buy Arrium, which produces iron ore and steel in South Australia.

That $1.1 billion offer was rejected by the Arrium board on the grounds it was lowball and “opportunistically” timed to coincide with a slump in iron ore prices.

1.50pm: Chinese telecoms equipment firm Huawei Technologies pledged today to increase its transparency to counter security concerns, proposing to set up a cyber security evaluation centre in Australia.

Huawei, which was barred from participating in Australia's $38 billion NBN and was the subject of a US Congress committee recommendation that firms stop doing business with it, said the proposed centre would give complete access to its software source code and equipment.

A similar centre was set up two years ago in Britain, where Huawei is involved in the rollout of the national broadband network, with the cooperation of the government. Security-cleared staff test Huawei's hardware and software at the UK centre to ensure it can withstand any cyber security threats.

1.35pm: It's been a busy day so far, let's have a look at how markets around the region are performing:

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

1.23pm: Australia needs better energy market regulation to address "significant and unnecessary" increases in electricity prices, which have risen 90 percent in the past five years, the country's competition watchdog said today.

Rod Sims, chairman of the Australian Competition and Consumer Commission (ACCC), said reforms should give consumers a greater say in the processes that affect the energy market and address issues that were driving up prices.

"These issues are: the flawed regulatory rules, problems in the Merit Review process, and concerns over the costs imposed by higher standards to be met by network businesses," Sims said in notes for an address at an energy conference.

The merit review process was meant to review regulatory decisions, but in practice had allowed electricity businesses to "cherry pick" some issues favouring themselves, Sims said.

Australia's electricity prices have on average increased by 90 percent in nominal terms in the last five years, and by more in some areas, according to the ACCC.

1.15pm: Looking for a little bit more on Australia's inflation figures? See what BusinessDay's Chris Zappone has to say.

If you wish to watch this video, please turn off the auto-refresh at the top of the page.

1.05pm: The dollar got another lift after China's PMI figures came in, jumping over $US1.03 for the second time today, peaking at $US1.0316.

12.55pm: China's manufacturers saw growth shrink for a 12th successive month in October, but output at a three-month high and the most robust order books since April signal a strengthening recovery, preliminary results of a purchasing managers survey show.

The China HSBC Flash Manufacturing Purchasing Managers Index (PMI) rose to a three-month high of 49.1 in October, the latest indicator of the real economy since official data last week showed GDP growth fell below target in Q3, despite signs of strength in September.

12.47pm: And more on the Billabong AGM, where founder and majority shareholder Gordon Merchant and board member Collette Paul have been re-elected to the company's board.

Australian Shareholders Association had recommended the pair be sacked for their role in the rejection of an $850 million takeover bid by TPG.

In proxy votes Mr Merchant achieved 68.28 per cent in favour of keeping him and 31.63 per cent against.

Ms Paul had 68.06 per cent in favour of her and 31.85 per cent against.

12.30pm: Now back to Melbourne and the Fairfax AGM again, where they're still asking questions of the board. Former Age managing director Ranald McDonald said the board should accept a "collective failure" to turn its existing mastheads into online classified businesses.

He asked what the new compact or tabloid versions of The Age and Sydney Morning Herald would look like and how widely they would be distributed.

"It will be distributed widely," chief executive Greg Hywood said.

He said the era of heavily subsidised newspaper distribution was over.

"We expect if you read the paper you pay for it."

12.22pm: There's bit of a discussion going on about just how much the carbon tax pushed up consumer prices. Shane Oliver tweeted this:

 JP Morgan economist Tom Kennedy said the carbon tax seemed to have impacted on the numbers.

‘‘It looks like the main rise was in the housing component,’’ he said.

‘‘That’s the area where we expected the carbon tax to have the largest impact - it includes electricity and housing fuels, both of which were up in the double digits.’'

On the other hand, Westpac's global head of interest rate strategy Russell Jones said the carbon tax had not made a major impact on inflation in the September quarter.

BusinessDay's Peter Hannam puts the debate into perspective here.

12.14pm: The Financial Times in London is reporting that BHP is looking to sell off its Pinto Valley copper mine in Arizona.

BHP said in February that it would restart operations at the Pinto Valley mine, with annual production capacity of about 60,000 tonnes of copper and which also produces molybdenum concentrate.

The FT said that BHP might get less than $1 billion for the company.

BHP shares have fallen 1.4% - 49 cents to $34.30.

12.11pm: Now for an opposing view on CPI and the effect it'lll have on interest rate decision-making.

 Rochford Capital managing director Thomas Averill said the numbers were not high enough to stop the RBA from cutting rates in November, but that expectations of future easing would moderate over time.

“The market had been looking for another 75 basis points cut down to 2.5 per cent over the next 12 months. You’re going to see those expectations moderate to 50 basis points worth of cuts,” he said. 

12.05pm: More on the CPI data and reaction from economists, who say the larger-than-expected rise in inflation for the September quarter could encourage the RBA to keep the cash rate steady at its next meeting om Melbourne Cup day.

JPMorgan economist Tom Kennedy said the result increased the likelihood that the RBA would decide against cutting the cash rate at its November 6 meeting. ‘‘They might move in December, rather than November,’’ he said.

Interest rate futures are down heavily pointing to just a 61% chance for a November cut.

11.56am: To the Fairfax AGM again, where they've moved on to the questions. Chairman Roger Corbett was asked by former ALP senator Chris Schott to explain the intentions of 14 per cent shareholder Gina Rinehart, who he described as "the elephant in the room".

The chairman said the board welcomed Ms Rinehart's shareholding and praised her "distinguished contribution" to the resources of the country.

He said the board had worked hard to accommodate her on the board but had to consider all shareholders.

Referring to Mr Rinehart's personal attacks on him, Mr Corbett said: "This has not been a Roger Corbett issue, this has been a board issue." 

11.53am: Back to Brisbane now and the Billabong AGM, where chief executive Launa Inman, who took on the job five months ago, updated shareholders on the progress of the company’s restructure.

Ms Inman said Billabong faced competition from the retailers globally and had to change. She said:

In this world, we must be famous for something and that is for our brands and products. The customer, who has more choices and ways to buy than ever before, must be at the heart of all we do because, ultimately, they determine whether we succeed or fail.

11.48am: The dollar has surged, rising a quarter of one US cent after the release of the stronger-than-expected inflation data.

The Bureau of Statistics has announced the headline consumer price index rose 1.4 per cent in the September quarter, for an annual rate of two per cent.

At 11.29am, the Australian dollar was at $US1.0273 and after the announcement it had risen to $US1.304. Its fallen back a bit since and is now at $US1.0287, but that's still better than it was overnight, when it fell as low as $US1.0236

11.34am: Back to the AGMs and Billabong, which is hoping for a brighter future, literally. 

At the surfwear company's AGM in Brisbane, chairman Ted Kunkel told shareholders that the 2011/12 financial year, where it suffered at $275.6 million net loss, was the most tumultuous in the company’s history.

But he's looking forward to sunnier conditions with company on track to deliver earnings in the range of $100 million-$110 million.

While trading conditions generally remain challenging, we are seeing some more encouraging signs in key markets, such as Australia and New Zealand, where the restructuring initiatives undertaken over the past 12 to 18 months are now beginning to yield results. In addition, early indications are for a better summer compared to the wet, cold summer in the prior year.

11.30am: Inflation rose 1.4 per cent  in the third quarter, following a 0.5 per cent rise in the second quarter, according to the Australian Bureau of Statistics. Economists polled by Bloomberg tipped a 1 per cent rise, as the impact of the newly implemented carbon tax filtered through the economy.

On an annual basis, inflation increased 2 per cent from a 1.2 per cent rise in the year to June, the ABS said. Economists forecast the inflation rate would tick up to 1.6 per cent in the year to September.

11.26am: More on Fairfax and the investors seem to be responding positively to Greg Hywood's comments about improving revenue. Fairfax shares are now up almost 8 per cent at 41 cents.

Mr Hywood had said that the future was digital but the company would continue to print newspapers as long as it was profitable to do so.

"This is not a revolution that is about to happen, it is now."

11.24am: Tokyo stocks opened 1.31 per cent lower after poor earnings and forecasts from major US industrial firms sent shares in New York plummeting.

The Nikkei 225 index at the Tokyo Stock Exchange was down 117.84 points at 8,896.41 at the start after disappointing results from DuPont, 3M and other firms helped push shares on Wall Street lower.

11.20am: Back to the Fairfax AGM, where chief executive Greg Hywood assured his audience that the changes that were being made at the company were to ‘‘maximise shareholder value’’.

Mr Hywood said Fairfax had a clear strategy to negotiate its way through a ‘‘perfect storm of cyclical weakness and structural change’’.

‘‘Let’s not kid ourselves,’’ he said. ‘‘There are challenges ahead."

Earlier the chairman, Roger Corbett, said the company is not ruling any options out when it comes to trying to turn around its business.

‘‘We will continue to examine all alternatives to optimise shareholder value, and we rule nothing out. We remain opportunistic and flexible with respect to value-enhancing transactions.’’

Fairfax shares have risen a couple of cents this morning - they’re up to 40 cents.

11.13am: Australia’s resources sector has become ‘‘fat and lazy’’ and it shouldn’t let lower commodity prices curb expansion and investment, Resources Minister Martin Ferguson says.

Mr Ferguson told this morning's Citi Australian and Asian G10 Rates Conference in Sydney that the sector had the opportunity to maintain or expand exports despite the declining market. He went on:

We must remain at the top of the game, delivering high quality goods and services that our export markets want, when they want them. ‘This is not a green light for us as a nation to remain complacent. Record commodity prices, I think, allowed us to become fat and lazy in terms of not managing our projects as best we could. Australia’s resources industry has many years of opportunities to come ... but we need to match world’s best prices and maintain our reputation for reliability and meet volume requirements.

11.11am: More on the Fairfax AGM, where chief executive Greg Hywood has told shareholders that there are signs that the downturn in revenues during the year to June 30, 2012, had begun to improve.

While revenues for the first six weeks of the 2012/13 financial year had been 10 per cent lower than the previous corresponding period, they had improved in September and October.

"‘It is impossible to make projections from here, but we will keep the market informed as the year unfolds,’’ Mr Hywood said.

11.07am: Shareholder activist Stephen Mayne tweets from the Fairfax AGM:
  

 

11.02am: An hour into the day and the All Ordinaries index is 31.9 points lower, or 0.7 per cent, to 4536.1, while the benchmark S&P/ASX200 is 30.3 points lower, or 0.7 per cent, to 4512.8. 

Wall Street closed lower, with the Dow Jones Industrial Average down 1.82 per cent in response to a number of disappointing earnings results from US corporates and fresh jitters in Europe.

RBS Morgans private client adviser Bill Bishop said it was a reflection of the relatively healthy state of the Australian economy that falls on the local market have been less severe than the slide on Wall Street.

‘‘This reaction on the market this morning is recognition that Australia is in a relatively solid position,’’ Mr Bishop said.

‘‘Things are not too bad here, while America and Europe are dealing with some really serious problems.’’

10.55am: Most family businesses are quietly confident of growth, but are failing to put succession plans in place early enough to protect their future, a new survey shows.

The findings, part of a global PricewaterhouseCoopers survey of 2000 family businesses, show that of 50 Australian respondents, 70 per cent are expecting to "grow steadily" within the next five years. Sixteen per cent said they would grow "quickly and aggressively" and the rest were planning to "consolidate".

10.50am: Apart from the local inflation numbers, investors will be looking at economic data out of China later today.

The HSBC Flash China manufacturing purchasing managers index is due at 12.45pm and signs of a further slowdown in the world's No. 2 economy would raise concerns about slowing demand for Australian resource exports.

China’s PMI  has disappointed several times over the past months, weighing on local stocks. The Sepember reading was 47.9. It was the 11th consecutive month of sub-50 readings, which signal a slowing in the sector.

10.45am: The big banks are a bit mixed this morning.

  • CBA is 0.05% higher to $57.13
  • ANZ is 0.08% higher to $25.73
  • NAB is 0.12% lower to $25.97
  • Westpac is 0.24% lower to $25.37

10.40am: Miner Whitehaven Coal has placed its shares in a trading halt as major shareholder Nathan Tinkler threatens to roll the company’s board.

The company on Wednesday said it would remain in a trading halt until Friday, pending an announcement.

The move comes after Mr Tinkler wrote to Whitehaven chairman Mark Vaile demanding an earnings update at next week’s annual meeting.

Mr Tinkler said if it was not provided he would vote against Mr Vaile and four other remaining board members using his 21.4 per cent stake.

Whitehaven shares last traded at $3.20.

10.32am: The big miners are all down so far this morning:

  • BHP is 1.31% lower to $34.335
  • Rio is 1.69% lower to $56.845
  • Fortescue is 1.9% lower to $4.13

10.28am: There are some bright spots this morning. Early risers today include:

  • Pacific Brands: +2.83%
  • Sundance Resources: +1.41%
  • APN News & Media: +1.37%
  • Virgin Australia: +1.11%
  • Arrium: +0.64

10.26am: The Fairfax AGM kicks off in a few minutes. If you're interested in watching proceedings, BRR are broadcasting the event. You can watch it here.

10.25am: Early sliders on the ASX200 this morning include:

  • St Barbara: -5.19%
  • WorleyParsons: -4.81%
  • Energy World: -4.23%
  • Bradken: -4.03%
  • Alumina: -3.61%

10.14am: All the sectors on the ASX200 are down in early trade this morning:

  • Materials: -1.70%
  • Consumer discretionaries: -1.44%
  • Energy: -1.33%
  • Industrials: -0.90%
  • Information technology: -0.75%
  • Health: -0.65%
  • Utilities: -0.62%
  • Finance: -0.57%
  • Telecoms: -0.52%
  • Consumer staples: -0.33%

10.11am: Things are still heading south. In early trade, the All Ordinaries index is 31.7 points lower, or 0.7 per cent, to 4536.3, while the benchmark S&P/ASX200 is 31.2 points lower, or 0.7 per cent, to 4511.9.

10.08am: More on the dollar. Steven Dooley at ForexCT reckons it’s going to be a busy morning for the Aussie. In a note this morning, he writes:

The Aussie dollar has a massive few hours ahead of it as we approach two crucial economic releases: Australian CPI at 11.30am and Chinese Manufacturing PMI at 12.45pm. Both of these releases have the potential to generate big moves. For CPI, with expectations on 0.9%, a number below 0.6% could see a sharp loss in the AUDUSD with a break of 1.0235 very bearish. A number above 1.0% could see the Aussie sharply higher. For the Chinese numbers, due at 12.45pm, the previous result was 47.9. A number below 47.0 is likely to see the Aussie lower, while a number above 48.0 could see the Aussie higher.

10.05am: As expected, shares are heading downward in the first few minutes.

9.53am: The bad day on Wall Street was no good for gold or oil either.

Oil hit a three-month low in New York as companies reported earnings results that missed analyst forecasts, bolstering concern that the global economy and fuel demand will slow. West Texas crude is down $US2.79 to $US85.94.

Gold was similarly badly off, with futures falling to a six-week low as the US dollar's advance curbed demand for the metal as an alternative investment. Palladium tumbled the most since March.

9.46am: The dollar has been making up lost ground this morning, after dropping nearly half a US cent overnight amid further pessimism over the global economy and concern that Australia’s inflation rate will be weaker than expected.

The dollar is now trading at $US1.0269 after falling as low as $US1.0236 overnight, its weakest level in a week.

US stocks fell overnight, after reports of poor earnings and forecasts from major US industrial firms added to global negativity. BK Asset Management director Kathy Lien said most currencies fell overnight in line with sharp falls in overseas equities.

‘‘The weakness in the Aussie has everything to do with the sell-off in US stocks,’’ she said.

Australian inflation figures, due out on Wednesday morning, are expected to show a rise in consumer prices of 1.6 per cent in the 12 months to September, well below the central bank’s two to three per cent target range.

‘‘There are fears that consumer prices may not be as high as economists expect,’’ Ms Lien said.

9.42am: Telstra has acquired South Australian internet provider Adam Internet to help expand its broadband network nationally.

The agreed acquisition is subject to ACCC approval and will see Telstra take over all of the business, including its data centre and fibre assets, Telstra said in a statement.

Adam Internet’s services include wireless and mobile broadband, as well as standard ADSL2+ connections.

Telstra said it would retain the Adam brand and run the company as a stand-alone subsidiary.

9.38am: There's more AGMs today with Billabong and Fairfax especially in focus. Billabong founder Gordon Merchant is expected to come under fire in Brisbane, as are the Fairfax board at the media company's meeting in Melbourne.

Other companies we'll be hearing from today include Origin Energy, Tatts and Southern Cross Media.

9.36am: The ABS releases CPI data for the September quarter this morning, with headline inflation expected rise year-on-year from 1.2 per cent to 1.6 per cent.

Over the three months to the end of September, inflation is expected to have risen from 0.5 per cent to 1 per cent, boosting the chances of another rate cut when the RBA meets on Melbourne Cup day.

9.34am: On the ASX24, the SPI futures contract was 41 points lower to 4491. The Aussie dollar was also weaker. It was recently buying $US1.0262, down from above $US1.032 late yesterday.

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

What you need to know

  • SPI futures are 33 points lower at 4499
  • The $A is lower at $US1.0259
  • In the US, the S&P500 lost 1.44% to 1413.11
  • In Europe, the FTSE100 fell 1.44% to 5797.91
  • China iron ore was flat at $US115.70 a metric tonne
  • Gold rose $2.10 to $US1707.3 an ounce
  • WTI crude oil fell $US2.79 to $US85.94 a barrel
  • Reuters/Jefferies CRB index was flat at 299.88

9.32am: Good morning folks. Welcome to the Markets Live blog for Thursday.

Contributors: Thomas Hunter, Jens Meyer, Max Mason, Richard Hughes 

This blog is not intended as investment advice 

BusinessDay with agencies