Australian shares have closed lower for the day, led down by the big miners.
5.10pm: That's all for today, and the week. We'll report on overseas markets tomorrow morning but the blog will rest until Monday. Thanks for reading and have a good weekend.
Here's our evening wrap of today's session.
4.47pm: Spanish 10-year bond yields have briefly topped 6 per cent again - a timely reminder that the eurozone debt crisis will continue to affect us next week.
4.35pm: This week our market again displayed a comparatively muted performance in comparison to that of the major US indices which have ridden the corporate earnings momentum, says CMC Markets trader Tim Waterer.
- The Australian sharemarket looked a little jaded to end the week, with traders appearing to have hit the ‘snooze’ button despite the solid performance of US equities in recent days.
- Given the nice lead from Wall Street, 4400 looked to be there for the taking on the ASX200 however selling pressure on our heavyweight materials and energy stocks put those aspirations on hold.
4.22pm: Among the main market movers were Macquarie, which rose 3 per cent after posting a brighter outlook.
PMP shares surged 148 per cent after the company received a takeover offer.
JB Hi-Fi shares slid 6.3 per cent after the retailer issued a profit warning.
4.19pm: Today's losses were led by the materials sector, which fell 0.6 per cent. Energy stocks shed 0.5 per cent and financials slipped 0.2 per cent.
4.15pm: That means the ASX200 posted a minimal loss of about 0.1 per cent for the week.
4.12pm: The market has closed at the day's low, following a last-minute selloff. The benchmark S&P/ASX200 index lost 13.1 points, or 0.3 per cent, to 4362.1, while the broader All Ords fell 11.6 points, or 0.3 per cent, to 4433.4.
4.05pm: If today's ASX200 losses remain where they are, the index will have managed to eke out a minimal gain of 3 points for the week, posting its third consecutive week in the black.
3.57pm: Chinese steelmakers, producing half of the world's output, have seen their profits tumble in the first quarter because of tepid demand, and a slowing economy suggests that business will remain tough in the coming months.
The world's second-biggest economy grew at its weakest pace in nearly three years in the first three months, slowing demand for the alloy used in construction, cars and ships.
Chinese steel companies swung to a loss of about 1 billion yuan in the first quarter from a profit of 25.8 billion yuan a year earlier.
3.44pm: The overwhelming majority may be tipping a 25 basis point cut, but there are still a number of economists calling for a 50bp cut:
But it's not only economists who think the RBA should be more decisive:
On TAB:for May RBA: A 50 bp cut into $2.80: from $3.10 this am and $3.80 yesterday... Smart money????— Stephen Koukoulas (@TheKouk) April 27, 2012
3.41pm: Investors are tipping a 100 per cent chance of a 25 basis point rate cut when the Reserve Bank meets on Tuesday, which would take the cash rate to 4 per cent from its current level of 4.25 per cent.
Additionally, there is a 30 per cent chance of a 50 basis point cut when the RBA meets, as it responds to a slowing domestic economy.
And the vast majority of economists polled by Bloomberg - 26 out of 27 - tip a 25 basis point cut next week, but only one economist, Citi’s Joshua Williamson, foresees a 50 basis point cut.
3.30pm: Oil has fallen from its highest level in almost four weeks in New York, trimming a second weekly gain, after a cut in Spain’s credit rating renewed concern that Europe’s economy may falter and curb fuel demand.
Crude for June delivery slid as much as 61 cents to $US103.94 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 43 cents yesterday to $US104.55, the highest close since April 2. Prices are up 0.9 per cent this week and 5.2 per cent higher this year.
3.15pm: Mining giant Rio Tinto has launched one of the biggest recruitment drives ever undertaken in Australia as it seeks 6000 new workers, with the help of some of the country's top Olympic athletes.
Rio has about $22 billion worth of projects underway or ready to start across the continent and needs to bump up its workforce dramatically.
"Rio Tinto is a major employer in Australia and with billions of dollars of new projects underway or ready to roll out we need more people to be part of our major expansion plans in Australia," spokesman Bruce Tobin says.
2.57pm: And in other monetary policy news, the president of the Richmond Federal Reserve Bank, Jeffrey Lacker, says he believes the US central bank will have to raise interest rates in mid-2013, not late 2014 as suggested in this week's policy decision.
For a third meeting running, Lacker was the lone dissenter against the Fed's calendar-linked interest rates guidance.
"I dissented because I do not believe economic conditions are likely to warrant an exceptionally low federal funds rate for this length of time," Lacker says.
2.50pm: The local market's reaction to Japan's monetary easing was hardly more than a blip, but Japan's Nikkei jumped on the news.
The index rose as much as 1 per cent and is currently about 0.5 per cent higher, after trading flat before the decision. The US dollar rose as high as 81.35 yen, from below 81 yen.
But analysts warn that the brief euphoria over the central bank move would be short-lived.
"The current market reaction has gone too far. The decision is in line with market expectations but it's good for the market. We are expecting a modest rise in the market in early May," says Hisao Matsuura, equity strategist at Nomura.
2.35pm: The Bank of Japan has further eased monetary policy, increasing its asset purchase program by 5 trillion yen ($62 billion) to about 70 trillion yen.
The central bank, which made the announcement after a one-day policy board meeting, said its board voted unanimously to keep its key interest rate unchanged at between zero and 0.1 per cent.
The BoJ also said it will expand it purchases of government bonds to those with longer maturities.
"The bank decided to increase the outstanding amount of the (asset purchase) programme to about 70 trillion yen by around end-June 2013," a statement said.
2.19pm: Engineering and infrastructure management firm Downer EDI has been awarded $NZ224 million ($177 million) of contracts by the Auckland Council in New Zealand.
The contracts are for road maintenance; park, playground and sports field maintenance; and facilities maintenance.The contracts all have options for extension.
2.08pm: Analysts have begun revising upwards their forecasts for sleep apnoea group Resmed following record March quarter earnings, which pushed its shares sharply higher yesterday, Brian Ronins reports.
In the quarter, earnings per share rose 29 per cent year on year to $US0.44, buoyed by revenue growth of 11 per cent to $US349.1 million. The pre-tax profit rose 18.3 per cent to $84.0 million.
2.02pm: Here's the latest rom Optus' loss in court today: Optus has suspended its TV Now service following a Federal Court ruling that it leaves it exposed to legal action from copyright holders.
Full update is here
1.45pm: More on Macquarie: CEO Nicholas Moore has talked down the prospect of acquisitions to generate growth, saying prices for potential targets no longer offered ‘‘exceptional returns’’.
Moore also remained coy on the prospect of further job cuts after the bank shed 1354 positions over the past year, including 426 jobs in the March quarter.
1.27pm: While investors are fretting over Spain's credit rating downgrade, it's not all doom and gloom today. Stephen Mayne rightly tweets:
Macquarie made $700m plus and stock up 3% today. The World Today should not be so gloomy. Many investment banks went broke. Hello Babcock!!— Stephen Mayne (@MayneReport) April 27, 2012
1.15pm: One from the small business desk about the power hungry narcissist in your workplace.
It can be your boss, a colleague, or an employee. The narcissist is a person with a grandiose sense of self-confidence who pursues power at any cost. Approximately one per cent of the population can be diagnosed with narcissism, and here’s the curious thing: it’s more prevalent in men than in women. But women are catching up.
1.01pm: And in case you haven't caught up with the details of the Spanish downgrade, you can read about it here. In a nutshell:
Standard & Poor's has cut its credit rating on Spain by two notches, citing expectations the government finances will deteriorate even more than previously thought as a result of a contracting economy and an ailing banking sector.
12.56pm: IG Markets market strategist Stan Shamu said the Standard & Poor’s downgrade of Spain’s credit rating had soured the mood on local markets today.
‘‘We didn’t manage to maintain the positive momentum that we saw in US markets, on the back of that S&P downgrade for Spain. That has been fairly negative for risk sentiment.’’
Mr Shamu said the profit downgrade from JB Hi-Fi had added to the gloom, especially after a profit downgrade from Seven West Media earlier in the week.
‘‘Those stocks are the bellwethers for consumer sentiment and how the consumer environment is going,’’ Mr Shamu said.
12.49pm: The Aussie dollar has receded from its overnight gains but it is eyeing $US1.04 heading into the weekend, says on analyst. Since 7am, the dollar has traded between $US1.0359 and $US1.0398.
CMC Markets foreign exchange dealer Tim Waterer said the currency drifted lower in line with the local stock market on Friday but remained well supported.
‘‘We’re having a fairly subdued performance on the local equity market which is keeping the status quo as far the currency is concerned,’’ he said.
‘‘But, by and large, it is still being rather well supported, it had a good look at the 104 US cent level, but it ran into a little bit of resistance. There is just not enough drivers during our session to get it past that level.’’
12.34pm: IG Markets market strategist Stan Shamu says the Australian market started positively with encouraging leads from United States markets, but the Standard & Poor's downgrade of Spain's credit rating had soured the mood.
''We didn't manage to maintain the positive momentum that we saw in US markets, on the back of that S&P downgrade for Spain,'' Mr Shamu says.
''That has been fairly negative for risk sentiment.''
Mr Shamu said the profit downgrade from JB Hi-Fi had added to the gloom, especially after a profit downgrade from Seven West Media earlier in the week.
''Those stocks are the bellwethers for consumer sentiment and how the consumer environment is going,'' Mr Shamu says.
12.19pm: Here's a lunchtime read for everyone who's ever fumed over a ridculously large telephone bill when checking out of a hotel: Hotels treat business travellers like mugs, writes Michael Pascoe.
Most of our most expensive hotels are a little like the major department stores, running a 20th century business model in the second decade of the 21st, Pascoe writes.
12.04pm: Jetset Travelworld, which is partly owned by Qantas, has warned that it has suffered from a softening in demand for travel in what is traditionally its busiest trading period.
The travel retailer, whose brands include Harvey World Travel and Qantas Business Travel, also indicated it might be forced to write down the carrying value of some of its assets if trading conditions do not improve over the next two months.
Jetset shares are down 3.85 per cent, while Qantas is off 0.9 per cent.
11.58am: Another market mover today is PMP. Its shares have surged 12 per cent to 28 cents after the struggling printer and publisher said it has received a highly conditional offer in a range of 68 to 78 cents per share.
Shares in PMP tumbled 13 per cent on Tuesday after a profit downgrade due to a decline in the retail and publishing markets.
11.54am: "Investors have maintained their cautiousness and that is being played out here today, the Spanish downgrade is filtering across the market," says Shaw Stockbroking senior dealer Jamie Spiteri.
11.43am: In Japan, the Nikkei is trading flat as investors wait for the Bank of Japan, which is widely expected to expand its asset-purchasing scheme by up to 10 trillion yen, with some strategists saying it may decide to buy longer-dated Japanese government bonds to stimulate the economy.
Although investors have held back from taking major positions this week before the announcement, the expected move has already been priced into the market, says Masayuki Doshida, senior market analyst at Rakuten Securities.
"The BoJ decision to ease in February was a surprise, but this time they're expected to, so unless they really dazzle today, the Nikkei won't go up. In fact it's far more likely to go down if they don't meet expectations," he says.
11.35am: The market has lost all its early momentum and plunged into the red. Materials are down 0.1 per cent, financials are trading flat and energy stocks are down 0.4 per cent. Telcos buck the trend with a 0.8 per cent rise.
11.18am: With JB Hi-Fi down heavily following its profit downgrade, here's how the other big retailers are faring today. In a word, mixed:
- Woolworths - up 0.15% to $25.86
- Wefarmers - up 0.37% to $30.19
- Harvey Norman - down 2.9% to $2.01
- David Jones - up 0.61% to $2.47
- Myer - down 3.35% to $2.31
11.08am: A couple of share price moves following analyst rating changes:
- ASX slid 0.6 per cent to $32.18 as Deutsche Bank downgraded shares of the Australian stock-exchange operator to 'hold' from 'buy'
- OZ Minerals climbed 0.7 per cent to $9.49 as Credit Suisse raised its recommendation on shares of the third-biggest Australian copper producer by market value to 'outperform' from 'neutral'
11.02am: Patersons securities senior adviser - and Fairfax columnist - Marcus Padley said the Australian sharemarket had opened fairly flat as investors digested a profit warnings from JB Hi-Fi following a profit downgrade from Seven West Media earlier in the week.
‘‘It’s hard to see the market breaking out in the face of a whole host of profit warnings and probably further profit warnings to come in the consumer discretionary sector and a (Chinese) PMI number which is very likely to perpetuate, rather than miraculously end the trend of weakening Chinese growth,’’ Mr Padley said.
10.57am: Japan’s unemployment rate was unchanged at 4.5 per cent in March, in line with economists’ expectations.
The Internal Affairs Ministry also said on Friday that household spending rose an inflation-adjusted 3.4 per cent from a year earlier in March. That is slower than an average 4.0 per cent growth that had been forecast by economists. Japan’s core consumer prices went up 0.2 per cent on-year, registering growth for the second consecutive month.
10.49am: The weak commercial property market has claimed another victim, with consultant Coffey International booking heavy write-offs which will wipe out its year to June earnings and undermine prospects for a quick recovery following its recent overhaul.
Shares in the company were dumped on the news, which was accompanied by a warning that no improvement in its project management division can be expected any time soon.
In mid-morning trading, Coffey was down 11 cents at 49 cents, an 18 per cent slump, with buyers on the back foot.
10.40am: Markets are now up 0.2 per cent in cautiously optimistic start to the day and still climbing.
10.36am: Looking at JB Hi Fi, City Index chief market analyst Peter Esho said that the electronics retailer faced difficulties in a market where consumers demanded lower prices before purchasing goods.
“Heavy discounting is a new reality and JB Hi-Fi is becoming a victim of its own success, when in prior years it was able to grow earnings and insulate its margins despite a very tough consumer electronics market,” he said.
“JB Hi-Fi’s shares have been weak over the past few months but yesterday’s closing price still represents a market capitalisation of just over $1 billion," he said.
Mr Esho said the business is probably close to maturity now so "there is no compelling reason to buy the stock."
10.31am: And to some of the early sliders:
- JB Hi Fi: -5.23%
- Western Areas NL: -3.5%
- Harvey Norman: -2.9%
- Paladin: -1.83%
- CSL: -1.76%
- Myer: -1.67%
10.27am: To some of the early gainers on the ASX200:
- Resmed: +4.55%
- Sundance: +3.23%
- Resolute: +2.48%
- Seven West: +2.41%
- Linc Energy: +2.24%
10.20am: Telstra shares have responded positively to news that the telco, the NRL and AFL have won their appeal against Optus's online broadcasting of Australian football and rugby league games, re-establishing Telstra's role as the nation's dominant online sports broadcaster.
Its shares were as much as 1.42 per cent higher, or five cents, to $3.55.
10.16am: Looking at how the various sub indices on the ASX200 are faring:
- Telecoms - up 1.09%
- Info tech - up 0.49%
- Industrials - up 0.24%
- Materials - up 0.18%
- Financials - up 0.07%
- Health - down 0.2%
10.12am: In early trade, the All Ordinaries index is 5.7 points higher, or 0.1 per cent, to 4450.7, while the benchmark S&P/ASX200 is 5.7 points higher, or 0.1 per cent, to 4380.9.
10.08am: Early take - markets edge higher. Up 0.1 per cent without all companies trading.
10.05am: MacBank shares higher - up 1.1 per cent. JB Hi Fi shares sharply lower - down 6 per cent and falling.
9.57am: Some analyst rating changes ahead of today's market open:
- CSL cut to 'hold' at Deutsche Bank
- CBA raised to 'buy' at Deutsche Bank
- ASX cut to 'hold' at Deutsche Bank
- OZ Minerals raised to 'outperform' at Credit Suisse
- Western Areas NL cut to 'neutral' at Credit Suisse
9.55am: West Australian miner Atlas Iron says it remains on track to meet its full year production target of 5.5 million to 5.7 million tonnes (Mt).
Atlas Iron said in the March 2012 quarter it had shipped 1.21Mt, down 13 per cent on the December 2011 quarter.
Production had been affected by tropical cyclones Heidi and Lua and a breakdown of the Utah Point ship-loading facility in January, it said.The average price per tonne for the three-month period was $US124 ($A120).
9.53am: Shares in industrial services company Spotless have been suspended from trading pending an announcement about its takeover talks with a private equity firm.
In a notice to the Australian Securities Exchange (ASX), the company said it expects to make an announcement before trading commences on April 30.
Spotless on Tuesday requested a trading halt until it was ready to make an announcement about the talks with potential suitor Private Equity Partners (PEP).
9.50am: Here's an interesting item from today's paper on Fortescue Metals. Prominent hedge fund manager and short seller Jim Chanos has singled out Fortescue as a ''value trap'' stock, telling a New York conference that shares in billionaire Andrew Forrest's company will fall ''materially''.
In a presentation to Grant's Spring Conference, a private investment forum, this month, Mr Chanos, the boss of Kynikos Associates, told investors he feared iron ore miner Fortescue had ''a somewhat promotional management team''.
9.43am: Home entertainment retailer JB Hi-Fi expects its profit to fall in the current financial year as its margins are impacted by heavy discounting.
The company today said it expected to post a net profit of $100 million to $105 million in the year to June 30, which would be down from $109.7 million in the previous financial year.
Sales improved progressively over the three months to March 31, and the company still expects to make $1.3 billion in sales for the full financial year. But market-wide discounting caused JB Hi-Fi’s gross margin to fall by two percentage points in the three months to March.
9.38am: Telstra, the NRL and AFL have won their appeal against Optus's online broadcasting of Australian football and rugby league games, re-establishing Telstra's role as the dominant sports broadcaster.
Earlier this year, Optus won a landmark Federal Court case which allowed it to continue operating its TV Now system, whereby viewers could watch video streams of AFL and NRL matches on their smartphones as close as two minutes behind the live TV broadcast.
9.35am: Turning to local matters first, Macquarie Group posted a 24.6 per cent fall in full year profit of $730 million but has held out hope for an improvement in its earnings outlook if global markets stabilise.
Banking reporter Eric Johnston writes the investment bank also reiterated its commitment to buy back as much as 10 per cent of its shares, including an initial commitment to spend $500 million in the buyback.
The latest result markets the third annual profit drop in as many years as the investment bank battles one of its worst trading periods since the financial crisis.
- The SPI was 18 points higher at 4399
- The $A was trading at $US1.0374
- In the US, the S&P500 added 0.67% to 1399.98
- In Europe, the FTSE100 added 0.52% to 5748.72
- Gold added 1.1% to $US1660.50 an ounce
- WTI crude oil added 43 US cents to $US104.55 a barrel
- RJ/CRB commodities index os 0.4% to 303.28
9.29am: Good morning everyone. Welcome to the Markets Live blog for Friday.
This blog is not intended as investment advice
Contributors: Thomas Hunter, Peter Litras, Jens Meyer
BusinessDay with agencies