US fears trump upbeat earnings
Aussie stocks were dragged down in morning trade on fresh worries about a US recession, while a tumble in oil prices hit energy firms. Elsewhere, companies gained on upbeat earnings and broker upgrades.
The Reserve Bank of Australia warned a global food shortage may sustain inflationary pressures at home, even if the drought breaks. In a research paper on the farm sector, the central bank said local food prices 'may remain higher than seen over recent decades for some time.
The report echoed concerns expressed last month by RBA governor Glenn Stevens, who predicted a consistent rather than temporary rise in commodity prices.
Economists expect the bank to follow up its interest rate rise with two more hikes this year.
At the lunch break, the
All Ords had lost 63.2 at 5599.8 while the
ASX/200 shed 69.6 at 5513.8, heading for a fourth straight weekly decline. By midday, almost 900 million shares had been traded.
Energy felt the impact of a weaker crude price, with the sector falling 2% in morning trade.
Woodside Petroleum dropped 1.7% while
Santos fell 4.2%. Yesterday, its shares dropped the most in over two decades on weaker-than-expected earnings and a production downgrade.
Caltex Australia, the nation's only listed oil refiner and marketer, fell 8.8% to book its largest one-day percentage fall in eight months after it reported a lower-than-expected 3.2% rise in net profit.
Consumer Staples was the only gainer, edging 0.1% higher.
Wesfarmers booked a record profit of $601 million, leading its stock 5.3% higher. Meanwhile,
Woolworths and
Foster's both fell around 2%.
Banks and Financials saw a loss of 2.1% in morning trade.
Among the big five,
Nab was the stand out loser, dropping 3.2% while
Westpac was close behind, losing 2.7%.
CBA and
ANZ were both down around 2%.
Australia's fifth-largest lender
St George shed 1% after said it had a $458 million fully secured exposure to Centro Properties Group, and additional exposure to two other problem-hit companies.
Investment bank
Babcock & Brown had another screamer, adding 5.4% by lunch. Yesterday it posted a 70% jump in net profit for the year. Meanwhile,
Macquarie lost 1.4%.
Among the insurers,
AXA and
QBE both lost around 3% while
AMP and
Suncorp were both down 2.2%.
Property Trusts continued to struggle, losing 3.8%.
GPT Group and
Goodman Group were both down 6.3%, while
Mirvac and
Stockland were both 4.5% in the red.
Meanwhile,
Westfield had shed 3.2%.
Materials and Resources were down 0.5% even with base metal prices all trading higher overnight.
Diversified miner
Rio Tinto and larger rival
BHP Billiton both lost 0.6%. Rio said it has entered an agreement to sell its interest in the Cortez gold mine in Nevada for US$1.695 billion.
Gold went to a new record over night but gold miner
Lihir fell 1.3% after it reported a full-year net loss on of $24.1 million.
Newcrest also seemed unpleased on the higher gold price, falling 2.6%.
Shares in the Consumer Discretionary sector were 0.3% lighter at lunch with
Austar shedding 5%,
News Corp down 2.2% and
APN News & Media 3.4% lower.
Meanwhile, retailers
Harvey Norman,
The Reject Shop and
Billabong added 6.6%, 5% and 7.3%.
Billabong reported its half-year net profit after tax of $88.7 million, meeting its guidance.
Tabcorp added 2.3% continuing its run from yesterday's smaller than expected 3.1% fall in half-year net profit.
Telecommunications were down 1.2% on the back of
Telstra and its instalments losing 1.3% and 2.2% respectively.
Industrials and Healthcare were both 0.4% lower at the break.
Primary Health Care and
Healthscope shed 3% and 4% respectively while
Downer EDI and
Virgin Blue bucked the trend to be up 5.9% and 8.4% by the break.
Utilities lost 2%.
SP AusNet and
AGL Energy both fell around 2.5%.
Information Technology was flat at the break.
Iress and
Silex both added 0.8% while
Computershare was 0.5% lower.
Around the region the
Nikkei 225 was down 174.0 to 13514.3 the
Straits Times Index was 29.0 lower 3025.8 and the
NZSE50 had shed 17.5 to 3569.1.
Spot gold was trading at US$941.50 and the
Aussie was buying US$0.9188.
Sims looks to 2H after lacklustre result
Sims Group has
announced 9.5% fall in net profit to $102.2 million for the first half ended 31 December 2007. The company said the figure was due to changes in accounting treatments and forecast increased prices and earnings in the second half.
At the luncheon break, shares in Sims Group had slipped 48c to $32.02.
Billabong shares jump 6% increased outlook
Billabong International has
announced half year after tax net profit of $88.7 million, a decrease of 2% in reported terms but an increase of 4.7% in constant currency terms over previous half. The company said that provided there is no material deterioration in its market, it expects to meet its guidance of 5% to 10% earnings per share growth for the full 2007-08 year.
Billabong shares were trading 90c above the gain line to $12.74.
Minara profit falls but has hopes for the future
Minara Resources reported a 19.6% fall in after tax profit for the year ended 31 December 2007 to $272.4 million, due to lower production following a statutory plant maintenance shutdown. The company said a number of profit negative events were now in the past and it looked forward to a step up in production volumes in the 2008 financial year.
At the bell, Minara shares had gained 22c to $5.82.
Coles offsets coal to lift Wesfarmers' result
Wesfarmers increased its half-year net profit by 53% to $601million. The diversified conglomerate said the result included a first time earnings before interest and tax contribution of $357 million from Coles, which benefited from strong sales over Christmas.
Wesfarmers shares were up $1.85 to $37.35.
Rio continues divestment strategy
Rio Tinto has
signed an agreement to sell its interest in the Cortez gold mine in Nevada, US to a subsidiary of its joint venture partner, Barrick Gold Corporation. The company said the sale price includes a cash consideration of US$1.695 billion ($1.845 billion).
Rio shares were trading 67c below the gain line at $133.01.
Lihir reports net loss of $24.1m
Lihir Gold reported a full-year net loss of $24.1 million, down 149%. The company said it was hit by the cost of closing its hedge book.
At lunch, Lihir shares were 5c lower to $3.85.
Slater & Gordon rakes in profits
Slater & Gordon announced 56% increase in net profit after tax for the half year ending 31 December 2007 to $6.9 million. The company forecast increased revenue for the full year on the back of recent acquisitions and said it would aggressively pursue further opportunities.
Shares in Slater & Gordon were trading flat at $1.35.
Newmont reports full year loss amid record gold prices
Newmont Mining announced a US$1.886 billion ($2.05 billion) net after tax loss for the year ended 31 December 2007, compared with a US$791 million profit a year earlier. The company said the downturn was largely due to a write-down of goodwill, and forecast improved operating results and aggressive exploration in the coming financial year.
At the bell, Newmont shares were 13c in the red at $5.44.
APN Property Group reports near 40% profit jump
APN Property Group reported a half-year after tax net profit of $10.042 million, up $2.8 million or 39% from the previous corresponding period. However, the company said that funds under management were higher than the same period last year but lower than funds under management as at June 2007 due to recent equity market volatility.
Units in APN Property Group had lost 2c to $1.23.
Hastings Diversified net profit up 11%
Hastings Diversified Utilities Fund reported its net profit attributable to members was up 11% to 17,606 for the full year to December 2007, compared to 2006. The firm increased its distribution guidance for the 2008 financial year by 4.1% over the distribution paid in the 2007 financial year.
At the break, units in Hastings Diversified Utilities Fund had slipped 1c lower to $2.70.