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Markets Live: Miners weigh on shares

Australian shares close at the day's low, as gains in the big banks (apart from ANZ) after a cash record profit by Westpac are offset by losses in the energy sector and among miners.

5.15pm: That's all for today - thanks for reading this blog. We'll be back tomorrow morning from 9.30am.

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

5.11pm: European stocks are up in early trade, reversing the previous day's losses as banks rally after Societe Generale posted reassuring results, but gains are limited as investors brace for Spain's first bond auction since its most recent downgrade.

Investors also await the European Central Bank policy meeting, expected to keep interest rates on hold at 1 per cent and resist calls to restart its bond-buying programme to ease pressure on Spanish debt.


In early trade, the FTSEurofirst 300 index of top European shares was up 0.6 per cent at 1049.52 points, with Societe Generale rising 3.8 per cent.

4.54pm: The European Central Bank will resist pressure to do more to fight the eurozone crisis when it meets in Barcelona later today, holding fire despite calls to restart its bond-buying program to help austerity-hit Spain.

Financial markets are clamouring for the ECB to step up its efforts to fight the two-year crisis by buying the sovereign bonds of Spain, which is in recession and is struggling to convince some of its people of the need for further austerity.

But ECB policymakers, who will face demonstrators protesting against Spain's harsh austerity measures in the Catalonian capital, are more likely to pay homage to the country's drive to cut costs than to signal any new policy action like restarting the bond-buy program, or Securities Markets Program (SMP).

"I think the reactivation of the SMP will occur only at a point at which the situation has deteriorated significantly and I think the pressure would have to be greater than that we've seen in recent weeks," says RBS economist Nick Matthews.

4.49pm: The Australian bond market was firmer today as investors fled to safe haven assets following the release of weak economic figures from China and the US.

The June 10-year bond futures contract was trading at 96.480 (implying a yield of 3.520 per cent), up from 96.410 (3.590 per cent) on Wednesday. The June three-year bond futures contract was at 97.150 (2.850 per cent), up from 97.090 (2.910 per cent).

4.33pm: Meanwhile, the dollar is struggling to stay above the mark of $US1.03, last buying $US1.0304.

The Aussie has already been under pressure after the Reserve Bank on Tuesday delivered an aggressive 50 basis-point rate cut. It has fallen 1.8 per cent so far this week.

Still, some think the Aussie should be a lot lower given the Australian economy has disappointed lately.

"I think it is incredibly overvalued... While prospects for the global economy continue to diminish, the Aussie seems reluctant to come back to earth," says David Scutt, a trader at Arab Bank Australia.

"It's more a consequence of how bad the other economies are going, rather than how good we are," he said, while adding the Aussie belongs way below parity.

4.20pm: Here's how some of the blue chips performed:

  • BHP: unchanged
  • Rio: -1.1%
  • Westpac: +1%
  • CBA: unchanged
  • NAB: +0.4%
  • ANZ: - 0.7%
  • Woolies: +1.6%
  • Telstra: +0.3%

4.17pm: Among the sectors, energy fell 1 per cent, materials lost 0.4 per cent, while financials inched up 0.1 per cent.

4.13pm: The market has closed at the day's low. The benchmark S&P/ASX200 index fell 6.9 points, or 0.2 per cent, to 4429, while the broader All Ords lost 10.3 points, or 0.2 per cent, to 4494.5.

4.04pm: Markets around the region are either flat or lower after disappointing economic data from both sides of the Atlantic rekindled concerns about the strength of global growth.

The weaker than expected US jobs data overnight is focusing attention on the broader non-farm payrolls report due on Friday.

"With those numbers still ahead of us people are going to be a little bit hesitant to jump into the market right at the present," says Angus Gluskie, portfolio manager at White Funds Management in Sydney.

3.55pm: And more from overseas: Spain's borrowing costs are set to rise by more than a percentage point at an auction of three- and five-year bonds later tonight, with markets watching for signs that its troubled banks are losing their appetite for the country's debt.

The sale is the first since Standard and Poor's cut Spain's credit rating by two notches to BBB+ last week and follows data showing the economy has slid into its second recession since late 2009.

"Spanish fundamentals remain a concern, as does the lack of international engagement at recent auctions. However, in the near-term such factors should not necessarily preclude a relatively smooth auction," says Peter Goves at Citi.

Three-year bonds were yielding around 4 per cent while five-year benchmarks were around 4.7 per cent on the secondary market on Wednesday, more than a percentage point higher than when they were last sold earlier this year - a good indication of the premium the government may have to pay at the auction. Ten-year bonds were yielding 5.83 per cent, slightly below the 6 per cent threshold seen as unsustainable for the country.

"That the yields will rise is a given. What will be interesting is whether the domestic banks continue to buy into the auctions or if they're starting to reach their limit," strategist at BNP Paribas Ioannis Sokos says.

3.36pm: Meanwhile, in overseas news:

EU finance ministers have inched closer to an agreement to beef up capital rules for banks against future crises after a heated debate between British-led nations and a Franco-German bloc.

The talks, which began at breakfast Wednesday, finally ended in the wee hours of Thursday with a compromise after discussions that saw Britain’s George Osborne warn he would not sign anything that would make him ‘‘look like an idiot.’’

The special meeting was called to find a common EU position on the Basel III regulation, which will require banks to increase their capital buffers to avoid a repeat of the massive bailouts they received in the 2008 financial crisis.

3.26pm: Heading for a modest overall gain - now - on the day at this point.

Meanwhile, Eumeralla Resources has listed on the market today.

According to the ASX, the company is 36th ASX listing in Perth and the 87th nationwide so far this financial year.

There are now 883 ASX-listed entities citing Perth as their home base out of a total of 2,225.

Eurmeralla shares were recently at 22 cents.

3.14pm: Meanwhile, this just in from BusinessDay's Matt O'Sullivan:

Ports and rail company Asciano concedes it will take time to change the work culture at Sydney’s Port Botany - its biggest container terminal - because rorting of the system by wharfies is ‘‘endemic in the DNA’’.

About 1200 wharfies at Asciano’s four Patrick container terminals will vote next Thursday on a new enterprise agreement, which is expected to bring to an end an 18-month long dispute that at times had come close to turning into a Qantas-style lock out of workers.

Asciano said today that it still expected second-half pre-tax earnings to be stronger than those in the first half, although the industrial dispute and weaker coal tonnages had ‘‘marginally reduced our expectations’’.

Before the industrial dispute flared again in March, Asciano had put the cost of the standoff at $15 million. The bill is now expected to be significantly higher but Asciano will not reveal the final impact on its bottom-line until it
releases its full-year results in August.

Shares in Asciano rose 4 cents to $4.79 today after the company released an update for the third-quarter.

3.07pm: Probably no point crying into your beer over the state of the economy. Turns out, it'll probably be some other beverage instead:

Beer consumption in Australia has sunk further in the past year, falling to the lowest level since the end of World War II, BusinessDay's Chris Zappone reports.
Total consumption of alcohol in form of beer dropped to 4.23 litres per person in 2011, from 4.45 litres the year before, the lowest level since 1945-46 when Ben Chifley was prime minister and wartime rationing was still a reality.

"Australia used to be a beer drinking nation," said CommSec economist Savanth Sebastian. "That has changed."

Wine consumption, amounted to 3.74 litres per person in 2010-11 from 3.82 litres per person the year before, according to the Australian Bureau of Statistics.
Beer accounted for only 42 per cent of all alcohol available for consumption in 2011, down from 43 per cent the year before, the ABS said.

2.54pm: James Packer has appointed investment bank UBS to sell his 25 per cent stake in pay TV operator Foxtel, Reuters quotes an unnamed source as saying, confirming News Ltd reports from this morning.

UBS will negotiate the sale of his 50.1 per cent stake in Consolidated Media Holdings, which holds the Foxtel pay TV holding, the source confirmed.

The sale, worth about $1 billion, would fund a takeover of casino group Echo Entertainment, News Ltd newspapers said today.

CMJ shares are up 0.9 per cent at $3.33 - about the highest in 18 months.

2.51pm: Fortescue says it’s open to talks with Atlas Iron to co-operate on rail haulage after the smaller rival announced a study to build its own track.

“If we’re invited to have a look at a proposal, we would certainly be honored to receive that invitation and take it very seriously,” Fortescue chairman Andrew Forrest says. “We have a railway line in the vicinity.”

2.48pm: Defence will delay buying 12 new Lockheed Martin F-35 Joint Strike Fighters by two years as the Gillard government aims to end four years of budget deficits.

The delay will save the government about $1.6 billion in its 2012-13 budget, Defence Minister Stephen Smith told reporters in Canberra today. A plan for self- propelled artillery has been scrapped, saving another $225 million from the budget that will be unveiled May 8, Smith said.

2.38pm: China’s market has slipped despite some renewed speculation the central bank may cut the reserve ratio for banks as early as this week. At least that's what the Oriental Morning Post writes.

‘‘Investors are in a dilemma,’’ says Wu Kan, a Shanghai-based fund manager at Dazhong Insurance. ‘‘On one hand, there’s constant speculation about policy easing so there’s hope looking forward. But fundamentals for the overall economy remain weak, as we can see from US data last night too. We will continue to see stocks fluctuating on uncertainties.’’

2.27pm: Asian markets are lower this afternoon following the weaker data from the US and Europe. The downbeat outlook has seen traders shift to safer assets, weighed on the euro and the Aussie dollar.

Hong Kong is down 0.5 per cent, Seoul has fallen 0.3 per cent and Shanghai is 0.11 per cent lower. The market in Tokyo is closed for a holiday.

2.16pm: Gold prices remain under pressure after the disappointing data from both sides of the Atlantic fueled concerns about global growth, while investors await a rate decision by the European Central Bank later in the day for more trading cues.

Spot gold is down 0.3 per cent to $US1647.69 an ounce, extending losses from the previous session. US gold is also down 0.3 per cent to $US1648.70.

2.08pm: Sales of new vehicles in Australia rose 6.6 per cent in April, from a year earlier, with another strong month for sport utility vehicles defying consumer caution elsewhere.

The Australian Federal Chamber of Automotive Industries says total vehicle sales in April were 79,097, compared with 74,214 in the same month last year.

2pm: Here's a change of pace... forget glugging coffee - when it comes to boosting alertness, nothing beats exercise, judging by recent Canadian-American research confirmed by sporty tycoon Richard Branson.

1.52pm: Fortescue Metals says it's open to talks with Atlas Iron to co-operate on rail haulage after the smaller rival announced a study to build its own track.

"If we're invited to have a look at a proposal, we would certainly be honored to receive that invitation and take it very seriously," Andrew Forrest says . "We have a railway line in the vicinity."

Atlas and haulage company QR National last month signed an initial accord to consider building the railroad in northern Australia's Pilbara region, which Macquarie Group estimates may cost $1.5 billion. Producers including Fortescue and Atlas are boosting ore output and expanding ports and rail to meet growing demand in China, the biggest consumer.

1.45pm: The housing sector may be struggling, but there is still a shortage of skilled labour in some parts of the building sector, a study has found.

The Housing Industry Association Trades Report shows five of the 13 housing trades were under-supplied in the March quarter.

These were in bricklaying, ceramic tiling, painting, plumbing and in the miscellaneous category.

HIA chief economist Harley Dale said the availability of skilled tradespeople is only marginally in surplus.

"These results provide compelling evidence of a structural shortage of skilled labour within the residential construction industry," he says.

1.37pm: Oil prices are lower in Asian trade with weak employment figures from United States and the eurozone weighing on the market, analysts say. Softer US energy demand also helped dampen sentiment.

New York's main contract, West Texas Intermediate crude for delivery in June is down 13 cents at $US105.09 per barrel while Brent North Sea crude for June is one cent down at $US118.19.

1.24pm: Stocks are down in China on a day of fluctuating trade. Wu Kan, a Shanghai-based fund manager at Dazhong Insurance, says investors have conflicting guidance on offer at the moment.

‘‘On one hand, there’s constant speculation about policy easing so there’s hope looking forward. But fundamentals for the overall economy remain weak, as we can see from US data last night too. We will continue to see stocks fluctuating on uncertainties.’’

1.20pm: Charter Hall Group has lost slid 2 per cent today to $2.43 after Goldman Sachs downgraded its recommendation on shares of the real-estate investor and developer to ‘‘neutral.’’

1.15pm: Oil and gas producer Eureka Energy has rejected a $107 million takeover offer from Aurora Oil & Gas. Aurora made the 45-cents-a-share offer for all the shares it does not already own in Eureka on Monday.

But Eureka’s board advised shareholders not to accept the offer, saying it was an opportunistic bid which undervalued the company.

‘‘Eureka notes that trading in its shares following announcement of the offer has been at a premium to the offer price, suggesting that purchasing shareholders similarly believe the offer undervalues the company,’’ Eureka said.

Eureka’s shares were two cents higher at 51 cents

1.08pm: The big miners are lagging behind the general market:

  • BHP is 0.36% lower to $36.12
  • Rio is 0.96% lower to $65.77
  • Fortescue is 0.53% lower to $5.62

1.01pm: Harvey Norman stocks are down 3.62 per cent, but they are not the only retail stocks doing it tough today. Woolies has managed to buck the trend:

  • Wesfarmers - down 0.42%
  • David Jones - down 1.56%
  • Myer - down 0.41%
  • Woolworths - up 1.25%

12.52pm: ASX Ltd has reported a 2.7 per cent fall in nine-month underlying profit, citing subdued activity in equity markets.

ASX, which is battling to defend its market share from new entrant Chi-X, said underlying profit after tax fell to A$261.6 million in the nine months to March 31. Statutory profit was down 2.9 percent at A$256.3 million.

"Since the start of the second quarter in October 2011 equity markets have experienced significantly reduced trading activity compared to a year ago when market conditions were more favourable," Chief Executive Elmer Funke Kupper said in a statement.

12.37pm: The Australian dollar has dropped below $US1.03 on weaker-than-expected Chinese data. The local unit was recently trading at $US1.0288, down from $US1.0334 at Wednesday’s close. Since 7am, the Australian dollar traded between $US1.0287 and $US1.0336 cents.

CMC foreign exchange dealer Tim Waterer said the Australian dollar had pushed downwards on the Chinese data.

‘‘The news factored that it was below the previous reading,’’ he said. ‘‘That was taken as a negative by traders, and because the Australian dollar is hypersensitive to all things China, the release was enough to bring the currency back below the $US1.03 level.’’

12.33pm: The ASX200 has slipped back into the red, weighed down by the big miners. Rio Tinto is off 0.9 per cent, while BHP has lost 0.2 per cent.

12.29pm: Mining giant Rio Tinto is facing rising capital costs around the world, not just in Australia, Prime Minister Julia Gillard says.

Rio Tinto is reportedly reviewing its coal expansion plans in Australia as it faces soaring capital costs and as investors pressure it to make more profitable iron ore projects a priority.

Rio Tinto chief Tom Albanese also raised concerns about the high cost of doing business in Australia.

12.15pm: The housing sector may be struggling, but there is still a shortage of skilled labour in some parts of the building sector, a study has found.

The Housing Industry Association Trades Report shows five of the 13 housing trades were under-supplied in the March quarter. These are in bricklaying, ceramic tiling, painting, plumbing and in the miscellaneous category.

12.11: Sales of new cars rose 6.6 per cent in April, from a year earlier, with another strong month for sport utility vehicles defying consumer caution elsewhere.

The Australian Federal Chamber of Automotive Industries said total vehicle sales in April were 79,097, compared to 74,214 in the same month last year.

Sales in April were down 19.0 per cent on March, which is typically a big selling month. Adjusted for seasonal factors, VFACTS estimated sales increased by a hefty 7.6 percent in April from the previous month.

Sales of sport utility vehicles continued their heady run with a rise of 27.8 per cent, compared to a year earlier, while gains in light and heavy trucks pointed to solid business investment.

12.06pm: One for Sydney ferry commuters: the NSW government says fares won’t go up due to the franchising of Sydney’s ferries.

Instead, commuters will get better services, NSW Transport Minister Gladys Berejiklian has vowed.

Berejiklian this morning said the Harbour City Ferries consortium - made up of Transfield Services and Veolia Transdev - had won the $800 million, seven-year contract to maintain and operate the harbour ferry services.

12.02pm: Leading the gains are banks, on the back of a record result by Westpac.

Westpac shares are 1.3 per cent higher, NAB is 0.3 per cent higher, CBA up 0.1 per cent, but ANZ is down 0.5 per cent after two downgrades.

"A lot has been said about the Australian banks and how vulnerable they might be in the current market climate, but what today's scorecard from Westpac shows is an ability to grow earnings, manage margin pressure and maintain loan quality in very tough economic conditions," says Peter Esho, analyst at City Index.

11.57am: The market is now trending higher and back in positive territory - the ASX200 is up 4.8 points, or 0.1 per cent, to 4440.1. Despite the pretty dramatic looking 'V' in the graph - the trading range for the session has only been about 10 points.

11.55am: Vodafone and Optus will enter a new joint venture building shared mobile sites and allowing Vodafone Hutchison Australia customers to roam onto the Optus network, Lucy Battersby reports.

This comes as Vodafone continues to spend money building new infrastructure to improve the reputation of its mobile network.

And about 900 base stations will be incorporated into the Vodafone network this year from the 3GIS network —  a eight-year old joint venture between Telstra and Hutchison '3' which was due to end this year following '3's merger with Vodafone in 2009.

New chief executive Bill Morrow said the deal with Optus was still subject to approval from the Australian Competition and Consumer Commission but would give Vodafone customers access to 400 Optus base stations. The joint venture would build 500 new shared sites over the next four years.

11.51am: More on the ANZ downgrade... two brokers downgraded the bank on fears for its profit outlook, putting pressure on the bank's shares.

CLSA lowered its ratings on the bank to "underperform" from "outperform", while UBS downgraded ANZ to "sell" from "neutral", with both brokers citing concerns that global markets won't be able to provide the earnings boost of recent months.

"ANZ has been the big outperformer year to date," says CLSA analyst Brian Johnson. "When I look at it, the result was bolstered by very strong global markets result, which even they are saying is not sustainable...I think consensus numbers need to move down a little bit."

While the ASX 200 has risen 9.4 per cent since January, ANZ has increased 15.3 per cent, ahead of Westpac which notched up 14.7 per cent in gains. NAB rose 8 per cent in that time while Commonwealth Bank shares rose 7.2 per cent.

ANZ shares are currently down 0.5 per cent, while the other big banks are trading higher, led by a 1.3 per cent rise in Westpac.

11.44am: Westpac chief Gail Kelly says global economic problems will continue to impact the domestic banking sector, with Europe's woes likely to roll on for years.

"We expect the difficult and volatile conditions to continue," she says.

"If you think about Europe we've got another decade probably of volatility and challenging environments."

11.37am: After a steady start, the dollar has also eased. It's now at $US1.0290. Click here for more currencies.

11.34am: Oil and gas producer Santos says reserving Australia's natural gas resources for its own use would be counter-productive.

Santos chairman Peter Coates says that a note of caution should accompany recent calls for the reservation of some domestic gas resources exclusively for Australian industry.

"As reasonable as this may sound on the surface, such government intervention could prove counter-productive for both Australian industry and the nation," Mr Coates has told shareholders at the company's annual general meeting in Adelaide.

Mr Coates said eastern Australia had abundant natural gas resources, particularly in coal seams.

"There is no shortage of gas," he says.

11.29am: E L & C Baillieu Stockbroking director Richard Morrow says the market is on hold prior to the federal budget.

"The market is very quiet in the lead up to the budget next Tuesday," Mr Morrow says.

"It seems to be still not finalised at present, and that's keeping a lid on things."

11.25am: The High Court has held that seven directors of the building group James Hardie Industries breached their duties by approving the company's release of a misleading statement to the stock exchange, Leonie Lamont reports.

It also held that company secretary and general counsel Peter James Saffron failed to discharge his duties with care and diligence, in relation to the actuarial work that underpinned the statement in which James Hardie said a compensation fund for asbestos disease victims was ''fully funded''.

11.16am: More on the Harvey Norman result, the company's shares have taken a hit, falling 4.8 per cent, or 10 cents, to $1.97.

The company says the result clearly shows the impact of aggressive competitor activity in the audio/video and information technology sector.

Here's the full story.

11.10am: In case you missed it earlier - or you were queuing at your local bottle shop - the latest vintage of Penfolds Grange has gone on sale and it's the US discounter Costco who has the bragging rights with the cheapest listed price. Here's the full story from Eli Greenblat.

11.03am: As the graph above shows, the market has fallen into negative territory. The ASX200 is now down 3.6 points, or 0.1 per cent, to 4432.3.

10.52am: Breaking news: Harvey Norman has reported a 6 per cent drop in like-for-like sales for the 9 months to the end of March. Profit before tax of $204.8 million. More to come. Its shares have dropped 7 cents, or 3.4 per cent, to $2.00.

10.47am: Back to the Commonwealth Bank rate moves for a moment. Residentially-secured CommBank business loans have dropped by 40 basis points, as well, the bank said.

10.43am: Looking at the early gainers on the ASX200:

  • Dart Energy - up 12.07%
  • Energy Resources Australia - up 5.76%
  • Imdex - up 2.32%
  • QBE - up 1.94%
  • Ansell - up 1.77%
  • Stockland - up 1.69%

10.36am: Transfield Services’s ferries joint venture has won a $800 million contract to maintain and operate Sydney’s famous harbour ferry services.

The contract between the NSW government and Harbour City Ferries, which is a 50/50 joint venture between Transfield and Veolia Transdev, is subject to several conditions. The seven-year contract is estimated to be worth $800 million and could be extended if performance targets are met.

Its shares are 0.6 per cent lower, or 1.5 cents, to $2.295.

10.31am: Looking now at how the sub indices on the ASX200 are faring:

  • Health - up 0.73%
  • Consumer discretionary - up 0.55%
  • Telecomms - 0.39%
  • Financials - 0.21%
  • Consumer staples - up 0.15%
  • Info tech - down 1.16%
  • Utilities - down 0.35%
  • Industrials - down 0.19%

10.25am: Wagering and gaming firm Tabcorp Holdings says the positive revenue trends experienced in the first half of the 2011/12 financial year have continued into the third quarter.

Tabcorp said today that revenues from January 1, 2012 to March 31, 2012 totalled $724.0 million, up 2.7 per cent on the prior corresponding period. Total revenues for the year to March 2012 were up 2.8 per cent to $2.3 billion.

‘‘Tabcorp’s revenue performance for the year to March 2012 continues to be positive and in line with the company’s first half performance,’’ Tabcorp chief executive David Attenborough said in a statement.

Shares in Tabcorp were 2 cents higher at $2.87.

10.20am: No, the subject of Edvard Munch's famous painting The Scream was not an Australian mortgage holder. Nor was it the painting's current owners, but it might have been after they last night pocketed a record $116 million for the work.

The 1895 artwork - a modern symbol of human anxiety - was sold at Sotheby’s. The previous record for an artwork sold at auction was $106.5 million for Picasso’s Nude, Green Leaves and Bust, sold by Christie’s in 2010.

10.17am: Asciano says it expects earnings for the second half of calendar 2012 to come in above the prior year. However, the ports and rail operator says delays in finalising a workplace agreement with the Maritime Union of Australia, as well as some external factors relating to its coal haulage unit, had reduced expectations.

‘‘We continue to forecast Asciano FY12 H2 EBIT (earnings before interest and tax) will be above FY12 H1 and above pcp (prior corresponding period),’’ Asciano chief executive John Mullen said in a statement today.

Its shares are 0.2 per cent higher, or 1 cent, to $4.76.

10.14am: In early trade, the benchmark S&P/ASX200 index was up 2.3 points, or 0.05 per cent, at 4436.1, while the broader All Ordinaries index was up 0.5 points, or 0.01 per cent, at 4505.4.

10.11am: Westpac shares are up as much as 21 cents, or 0.9 per cent, to $22.90. Westpac today posted a bumper first-half profit as both banks consider how much of this week's official interest rate cut to pass on to customers. First-half cash profit came in at $3.195 billion, up 1 per cent from a year earlier, and slightly more than the $3.12 billion profit expected by analysts.

10.07am: Early take - shares are flat markets open. No gains or losses to speak of.

10.03am: ANZ shares are down 24 cents, or 1 per cent, to $23.56 on news that UBS downgraded the stock from neutral to sell. CBA shares are basically flat following today's rates announcement - down 6 cents, or 0.1 per cent, $52.62.

9.57am: Activity in the Australian services sector has reported its weakest performance in three years during April, a private survey shows. The Australian Industry Group/Commonwealth Bank Australian Performance of Services Index (PSI) fell 7.4 points to 39.6 points in April. A reading below 50 indicates a contraction in activity.

None of the nine sub-sectors covered by the survey recorded rises in activity in the month, with the greatest weaknesses seen in finance and insurance, personal and recreational, and health and community services sub-sectors.

9.53am: Something for the bookmarks list. BusinessDay has a special federal budget page up and running. You'll find all budget news leading up to next Tuesday's budget and then all the fallout, reaction and commentary.

9.49am: Although it has been somewhat shaded by the bank stories, James Packer is in the news today with reports that he is ready to sell his 25 per cent stake in Foxtel for a $1 billion with the likely buyer News Corp.

News Limited reports he wants the cash to pursue a full merger of his Crown Casino in Melbourne and Sydney's Star Casino to create a $10 billion gaming giant.

9.46am: Also in banking news this morning, Westpac has posted a bumper first-half profit.

Westpac's first-half cash profit came in at $3.195 billion, up 1 per cent from a year earlier, and slightly more than the $3.12 billion profit expected by analysts.

The net result, though, was less positive. Westpac's first-half net profit fell 25 per cent to $2.97 billion - in line with market expectations. The bank blamed a rise in bad debts and costs associated with setting up the Bank of Melbourne for dragging its profit lower.

9.42am: Some more analyst rating changes for today:

  • Mirvac Group cut to 'neutral' at Credit Suisse
  • Stockland upgraded to 'outperform' at Credit Suisse
  • Alesco downgraded to 'neutral' at Credit Suisse
  • DuluxGroup downgraded to 'neutral' at JPMorgan

9.40am: UBS, meanwhile, has downgraded ANZ Bank stock to 'sell' from 'neutral' on concerns for the bank’s Australian business levels.

9.38am: Damian Smith, chief of rate tracking company RateCity, said CommBank's mortgage rate reduction was more than he had expected and could prompt other banks to follow.

"It’s a little more than we thought they would do," he said. "If the others pass on 40 basis points that will set the trend for the smaller banks and non-bank lenders to do 35-40 basis points."

With mortgage rates now advertised around 7 per cent, consumers with a 20 per cent deposit should now be able to get a 6.3 per cent mortgage package from banks like Commonwealth Bank and NAB, said Mr Smith.

9.35am: Commonwealth Bank has moved to lower their standard variable interest rate by 40 basis points following the Reserve Bank's 50 basis point cut on Tuesday.

Standard variable rate loans at CommBank will be 7.01 per cent, effective Friday, May 11. The move outpoints National Australia Bank, which yesterday cut 32 basis from its borrowing rates. Westpac and ANZ are yet to announce their decisions. ANZ is due to release its decision next Friday.

9.32am: For a comprehensive look at this morning's business news, check today's need2know and the business press digest. Here are the key markets links for today:

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

This blog is not intended as investment advice

Contributors: Thomas Hunter, Peter Litras, Peter Hannam, Jens Meyer

BusinessDay with agencies


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