Markets Live: Chinese data weighs on stocks
Australian shares end slightly lower, dipping into the red for the first time in four sessions as weak Chinese data raised fears of a slowdown in Australia's biggest trading partner, outweighing good local jobs data.
- Jobless rate steady as employment grows
- The dollar jumps above $US1.06 on jobs data
- Weak Chinese data spurs hopes of easing
- Telstra profit falls short of estimates
- All of today's and this season's earnings reports
These are goldilocks jobs numbers - not too hot, not too cold.
5.03pm: Our live coverage of the markets is now ending. Thanks everyone for reading this blog and posting your comments - we'll be back tomorrow morning at 9.30am.
For a wrap of today's session, click here.
4.39pm: The following Chinese data was released today:
- Consumer prices rose 1.8% yoy (1.7% expected)
- Producer prices fell 2.9% yoy (2.5% fall tipped)
- Industrial production rose 9.2% yoy (9.7% tipped)
- Retail sales grew 13.1% yoy (13.5% predicted)
4.33pm: Despite the late local turnaround after weak Chinese data, European stock futures are up, indicating the region’s equities will gain for a fifth day.
Futures on the Euro Stoxx 50 Index expiring in September have added 0.6 per cent. Contracts on the UK’s FTSE 100 Index and on Germany's DAX have both increased about 0.4 per cent.
S&P 500 Index futures rose 0.3 per cent.
4.21pm: The Australian dollar hit a 4-1/2 month high today after a robust jobs report prompted investors to widen the odds of further cuts in interest rates, but gains were trimmed in late trade after weak Chinese data offered fresh evidence the world's second biggest economy is slowing.
The dollar rose as high as $US1.0615 before retreating somewhat to recently trade at $US1.0595.
"The jobs data will provide another degree of comfort for the Reserve Bank. An array of indicators has suggested that activity levels have bottomed out and showing modest signs of improving," says Savanth Sebastian, an economist at CommSec.
Sebastian, however, says that further rate cuts remain on the card with worries about the eurozone debt crisis and a hard landing for China still festering in the background.
Interbank futures are not fully priced for a 25 basis-point cut until November. Overnight index swaps, which essentially plot where the market thinks the cash rate is heading, now imply rates of 3.13 per cent in 12 months, compared to 2.5 per cent as recently as June.
4.14pm: Strong rises in the materials sector, which ended 1.4 per cent higher, and among energy stocks (plus 0.9 per cent) failed to outweigh falls in financials (-0.5%), telcos (-2.2%) and among consumer discretionary stocks (-1.4%).
4.12pm: The sharemarket has closed slightly lower, ending a three-day rally. The benchmark S&P/ASX200 index slipped 4.3 points, or 0.1 per cent, to 4308.3, while the broader All Ords fell 2.8 points, or 0.1 per cent, to 4330.1.
4.04pm: As the market settles, here's what CMC Markets' Ben Taylor makes of today's session:
- After three days of solid gains the market seems to be slowly running out of steam. The better than expected Aussie job numbers helped to consolidate this week’s gains while our mining sectors recent underperformance gap is starting to be closed.
- The only real beneficiary of today’s stronger than expected Australian jobs figures was the Aussie dollar which sent the risk currency skyward above 1.06.
- The jobs data confirms the RBA’s assessment of the Australian economy and suggests to me that no further rate cut will be evident before the end of the year unless European factors deteriorate more than expected.
- As we now sit at the top end of the recent Aussie 200 range, I believe we will see a break above this range in the coming months as our miners play catch up to Australian bank out performance.
3.54pm: The weakish Chinese data has put pressure on the local sharemarket, which has just slipped into the red. The dollar has retreated back below $US1.06 and was recently trading around $US1.0590.
3.48pm: More economic data has been released in China and like this morning's inflation numbers they offer further signs of weakness in the economy of Australia's biggest trading partner.
Industrial production rose 9.2 per cent in July from last year, down from an annual growth rate of 9.5 per cent in June and lower than the 9.8 per cent economists were expecting.
Year-on-year retail sales growth also eased somewhat to 13.1 per cent, from 13.7 per cent in June. Excpectations had been for 13.5 per cent growth.
3.45pm: Whether for modesty, camouflage or sheer laziness, the Australian arm of French giant Suez Environnement calls itself a "small proprietary company", Michael West notes in Full compliance is no petitesse:
That its Antipodean activities, which include the large and distressed Melbourne desalination plant, make Suez the largest PPP contractor in this country must not suit Suez’s laissez-faire approach to complying with local laws and customs.
Of course, Suez is by no means alone when it comes to this attitude cavaliere towards compliance. As revealed here over the past few months, the likes of G4S, Veolia and immigration detention mob Serco – foreign multinationals all with big government contracts in this post-colonial outpost - hardly bother either.
Suez's efforts to quietly downplay its existence in this country, in a public reporting sense at least, were shattered by the loud outcry over the desal plant and the ensuing furore over PPPs (public private partnerships).
3.40pm: The drop in Chinese consumer inflation to 1.8 per cent has also contributed to rising regional sharemarkets, with investors speculating the lower number leaves room for more policy easing to support growth.
"This number gives more room for policy easing. It is now pretty clear that CPI will likely be below the official 4 per cent target for the year, so the policy focus for the government can stay clearly on growth," says Zhang Zhiwei, chief China economist at Nomura in Hong Kong.
3.28pm: The long-haul arm of budget carrier AirAsia says it will add six leased aircraft to its fleet as it pushes to build up its presence in the Asian region.
AirAsia X will lease the six Airbus A330-300s from the US-based International Lease Finance Corp in a deal worth approximately $US500 million.
"We intend to deploy the additional capacity with a vision to solidify our positions in our identified core markets including Australia, China, Taiwan, Korea and Japan," AirAsia X CEO Azran Osman-Rani said in a statement.
3.18pm: Here are five things you need to know about today's jobs data.
3.05pm: Bendigo and Adelaide Bank has sold its 7.8 per cent stake in listed wealth management firm IOOF for $110 million.
The rural bank says its earnings for the year to June 30 would receive a $40 million boost from the sale.
Bendigo managing director Mike Hirst says the sale followed a strategic review of its investments but that the working relationship between the two companies would remain strong.
2.55pm: The Commonwealth Bank says its acquisition of BankWest saved the Australian economy from a major financial shock during the global downturn.
CBA group executive David Cohen has told an inquiry in the company’s financial strength allowed it to acquire BankWest in 2008 from its UK-based parent HBOS plc.
‘‘That acquisition proves significant in maintaining public and investor confidence in the stability of the Australian financial system,’’ Mr Cohen told the senate inquiry into the banking sector in the aftermath of the 2008-2009 global financial crisis.
‘‘While some commentators have pointed to the acquisition price of approximately $2 billion as ‘a bargain’, what is less well recognised is that CBA also had to source $17 billion to replace BankWest’s funding liabilities."
2.49pm: Treasurer Wayne Swan says the latest jobs numbers are another factor that puts Australia’s economy in a ‘‘league of its own’’.
‘‘Today’s figures shine more light on Australia’s strong set of economic fundamentals, which put our economy in a league of its own,’’ he says.
‘‘Australia’s outstanding economic record stands in stark contrast to many developed economies, which continue to experience weak or negative growth and stubbornly high unemployment levels.’’
2.25pm: Stocks are also rising across the region: Hong Kong stocks are up 0.82 per cent, with the benchmark Hang Seng Index gaining 165.35 points to 20,230.87.
Shanghai stocks are up 0.4 per cent and South Korean stocks are up 1.4 per cent.
2.11pm: Tokyo stocks have risen 1 per cent after the Bank of Japan stuck to its view that the economy is picking up moderately and held off further easing measures.
As afternoon trading starts, the bank has also announced it will leave interest rates unchanged at between zero and 0.1 per cent while holding steady on a 70-trillion-yen asset purchase programme, its key policy tool.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange is up 1.04 per cent or 92.57 points at 8973.73, while the broader Topix index of all first-section shares has gained 0.59 per cent, or 4.52 points, to 750.22.
1.56pm: Regis Resources' $150 million deal to buy the McPhillamys gold resource in western NSW has lifted the company's shares nearly 3 per cent, after the deal won quick endorsement from at least one analyst.
The shares are up 13 cents to $4.67 but Deutsche Bank has a $4.85 target price on the stock, which it rates a "buy".
‘‘This sees Newmont's share of Regis go from 16 per cent to circa 19 per cent,’’ Deutsche Bank said in a note to clients this afternoon. ‘‘This puts an end to speculation as to how Regis will take advantage of its share price premium in the current market.
‘‘The project represents a strong growth option beyond Duketon (albeit long-dated), and we back management to develop and deliver another open pit mine.’’
This analyst said the ‘‘buy’’ on Regis reflects the quality of management, the company's growth profile and its low risk operations.
Alkane shares were up 4 per cent.
1.45pm: The market has trimmed some of its gains but is still being buoyed by the mining sector.
‘‘Resources had a much needed shot in the arm - they’re enjoying a sunny day," RBS Market private client adviser Bill Bishop says.
1.29pm: Tabcorp shares are down nearly 4 per cent despite the company meeting earnings expectations with an underlying profit of $340 million for the financial year.
Deutsche Bank gaming analyst Mark Wilson says that while the result is solid there are negatives ahead.
$17 million of corporate and IT overhead need to be allocated across the remaining business when its poker machine licence expires next year. The company also indicated pro-forma wagering earnings of $150 million compared to Deutsche estimates of $190 million for the 2014 financial year.
1.20pm: An executive of Gina Rinehart’s Hancock Prospecting has criticised the federal government’s ‘‘class war’’ on big business as he accepted an industry award.
Hancock Prospecting chief development officer John Klepec picked up the Dealer of the Year Award on the company’s behalf at the annual Diggers and Dealers mining conference in Kalgoorlie. In his speech he said the federal government’s policy towards business had been delivered to the Australian public ‘‘draped in a smoke screen of old-style class war antagonism ... especially the mining sector and its leaders such as Mrs Rinehart’’.
‘‘As Mrs Rinehart says, it is time to stop the smoke screen of this divisive class warfare and get on with building projects to help Australia get out of its record debt,’’ he told delegates last night. ‘‘Let’s get back to our roots, the roots that built this country and enabled jobs and revenue and opportunities.’’
1.14pm: Charlie Aitken's prediction of an end to the bear market is a big call, considering that the European debt crisis is far from over.
Do you think the tide is finally turning for equities? Send us your comment.
1.10pm: As the local market remains poised to post a fourth straight day of gains, the bulls are starting to emerge. Bell Potter's Charlie Aitken reckons the five-year bear market ends this month:
- We have the best economic fundamentals in the world and are about to see Australian companies report very solid earnings and full year dividends.
- I am convinced Australia equities will follow the lead of the AUD and AUD Bonds and play catch up to the world between now and year end…the stars are aligned for the five year bear market to end as we get confirmation this month about the strength of Australian corporate earnings and sustainable dividends.
- I also believe that Chinese GDP growth rates have bottomed and you at therefore at the bottom in Australian resource stocks.
- All the same “experts” who told you the Eurozone would break up, that Australian property would crash, that Australian banks were going to have a huge bad debts cycle, Australian banks were ‘speculative’, Telstra was structurally stuffed @$2.60, and issued ‘correction warnings’, now tell you it’s all over for China, iron ore and Australian resource stocks. It’s all the same scaremonger ‘experts’!
- They are now textbook corpse kicking China and Australian resource stocks at will prove the bottom; that is why I am really stepping up the aggression with high conviction recommendations in leading Australian resource stocks.
- Taking on the consensus ‘commentate/scarebroke the present’ has been very, very rewarding in Australian equities, if you do it at the peak of fear and the peak of short interest. That is right now in Australian resource stocks. BHP is TLS @$2.60 all over again in my view.
- In my career I have never seen such divergence between risk and safety. Risk has never been cheaper and safety never more expensive.
Aitken also notes that “for all the corpse kicking that has gone on in Europe this year”, Germany’s DAX bottomed in September and is now up 35 per cent from those lows and France’s CAC 40 is up 21 per cent, but the ASX200 is only 10 per cent above its September low as the index has been held back by the poor performance of resource equities.
12.41pm: ANZ has posted a comment on the easing Chinese inflation, which showed consumer prices edging up by only 1.8 per cent, generally in line with market expectations:
- With base effects beginning to diminish, inflation rates will gradually pick up towards the end of the year, albeit at a modest pace.
- Lower inflation offers room for monetary policy easing.
- We incline to view that PBoC should cut RRR by 50bps as early as this month, followed by another 100bps to support a cyclical upturn in H2.
12.27pm: Here's a lunchtime read by Ian Verrender on corporate bonuses:
Amid all the headlines and the hand wringing over BHP Billiton's write-downs last week, perhaps the biggest impact from the affair is that Marius Kloppers may have started a revolution by directly linking his pay to performance and to shareholder returns.
As ludicrous as that sounds, Kloppers' decision stands starkly at odds with the trend in corporate ranks during the past decade and a half when the bonus has become more important than salary and where the opaque calculations and hurdles have become a source of intense irritation to shareholders and the broader community.
12.23pm: Meanwhile, JPMorgan's Stephen Walters says the jobs numbers are reasonably good, but he doesn’t see an improvement in the latter half of 2012:
- You’ll get some softer employment gains in the next six months or so as you see industries affected by the Aussie dollar going up and global (economic) weakness.
- That affects the investment pipeline and also those tourism and retail jobs.
- He expects the RBA to cut the cash rate from its current level of 3.5 per cent by December.
- It’s going to be very gradual on the jobless front. We don’t expect any spikes in the unemployment rate, it’ll be running at that 5.2 per cent, 5.3 per cent level.
12.10pm: And another upbeat comment on the jobs data, this one from CBA chief economist Michael Blythe who says the labour market is a glass half full:
- It's obviously generating just enough jobs, despite losses in some areas, to keep unemployment constant.
- The fact we seem to be tracking sideways just underlines the economy is in reasonable shape, and domestically at least probably not in need of much extra assistance right now.
12.07pm: Tabcorp chief executive David Attenborough has refused to reveal his hand on whether the gambling operator is preparing to sue the Victorian government over its refusal to pay compensation for the loss of its poker machine licence in Victoria next week.
Tabcorp and local rival Tatts, lose their poker machine duopoly in the state on August 15, and under the terms of the licence they expected to receive more than $1 billion compensation between on August 23 for losing the licences.
‘‘We really are not prepared to comment until the due date,’’ Attenborough said on a conference call today. He said the company has looked at various options to get the money said at this stage ‘‘we’ve made no decision’’.
12.02pm: The stockmarket seems to agree to Ms Chan's assessment of the jobs numbers and has just hit the day's high, up 0.4 per cent. The gains are being led by a rally among miners, with the materials sub-index up 1.8 per cent.
Rio shares are up 3.7 per cent, while BHP has jumped 2.2 per cent.
11.59am: And another comment: "These are goldilocks jobs numbers - not too hot, not too cold," says St George Bank economist Janu Chan.
- Overall the jobs gains over the course of the year have been moderate.
- It's encouraging the unemployment rate is quite low.
- The economy has gained an average of 14,000 jobs a month this year, compared with an average of zero over the past year.
- Today's numbers don't change too much the overall picture of the labour market as far as the RBA is concerned.
11.57am: Some more on the jobs data, this time state by state:
The unemployment rate ticked up to 5.2 per cent in NSW, from 5.1 per cent in June, in Victoria it improved, falling to 5.4 per cent from 5.5 per cent in the same period, seasonally adjusted.
However, in Queensland, beset by a struggling tourism sector and difficulties in coal export industry, the jobless rate jumped to 5.8 per cent in July from 5.3 per cent in June.
In Western Australia, joblessness ticked up to 3.6 per cent from 3.5 per cent.
The unemployment rate improved in Tasmania, falling to 6.5 per cent from 7.4 per cent, while in South Australia the jobless rate fell to 5.4 per cent from 6.4 per cent.
11.51am: Former AWB head Andrew Lindberg will pay a $100,000 penalty and has accepted a ban from corporate life until September 2014 over his role in the Iraq oil-for-food scandal that engulfed the wheat exporter.
Victorian Supreme Court Justice Ross Robson this morning gave approval to a deal between the corporate regulator and Mr Lindberg in which he admitted four breaches of his duties as a director of the AWB.
The breaches related to Mr Lindberg's failure to inform the AWB board of matters related to the company's relationship with the former Iraqi regime of Saddam Hussein and details of allegations put to him by an UN inquiry into the oil-for-food scandal in 2005, following the fall of the Hussein regime.
Justice Robson said he accepted the proposed penalty, although it was "at the upper end of the range".
11.46am: Meanwhile, the first comments on Australia's robust jobs numbers are in:
Although the July jobs numbers look firm, the outlook for the labour market remains weaker, said Moody’s Economy.com analyst Katrina Ell.
‘‘Employment growth surprised on the upside in July,’’ she says. ‘‘This only partially reverses the 33,500 jobs lost in June.
‘‘Forward-looking indicators keep suggesting the unemployment rate will drift slightly higher in the third quarter, being a lagging indicator of how slower global growth has hit confidence and export-facing industries."
11.42am: Tweets on Chinese data, pointing out why the numbers are a worry:
#China #CPI up 1.8%YoY in July, again confirming disinflationary impulse in an economy where actual growth well below potential.
- Glenn Maguire (@AsiaSentry)
The last thing the Australian economy wants to see is low inflation in China... suggests falling commodity prices
- Stephen Koukoulas (@TheKouk)
11.39am: And here's the Chinese data: consumer prices rose 1.8 per cent in July, down from 2.2 per cent in the previous month and a bit more than expected (1.7%), while producer price deflation accelerated to -2.9 per cent, from -2.1 per cent in June (expectations were for a 2.5 per cent drop).
11.34am: The unemployment rate has actually dropped as the June number was revised upwards to 5.3 per cent.
Hours worked in the economy rose a solid 0.8 per cent.
11.32am: The dollar and stocks have reacted positively to the data, with shares extending their gains and the Aussie climbing as high as $US1.0589.
11.30am: The jobs data is out and the numbers are better than expected: the unemployment rate remains steady at 5.2 per cent (5.3% was expected) and 14,000 new jobs were created - that's 4000 more than expected.
11.27am: Bracing for the big data dump: it's not only Australian employment numbers that will be released at 11.30, but also China's consumer and producer prices for July.
The dollar, meanwhile, is hovering at $US1.0570.
11.20am: The takeover battle for Hastings Diversified Utilities Fund (HDF) has stepped up with pipeline operator APA Group increasing its offer. APA has also announced plans to raise $350 million to fund its takeover - if successful - through the issue of listed notes.
Hastings is subject to two takeover offers: a cash-and-scrip offer from APA and an all-cash offer from Pipeline Partners Australia (PPA).APA’s previous offer had an implied value of $2.00 per HDF security. On Thursday it increased it to $2.56.
11.14am: Stocks are just tipping into negative territory. If the ASX200 closes down today it will break a three-day winning streak. We've got jobs coming up at 11.30am, which could influence sentiment. A quick reminder of what the market is expecting.
A Bloomberg survey of economists expects the unemployment rate to rise for the third month in a row. The survey predicted the jobless rate would climb from 5.2 per cent to 5.3 per cent despite the addition of the 10,000 jobs. The unemployment rate rose from 5.1 per cent to 5.2 per cent in June.
11.11am: Residential developer AV Jennings says its short-term outlook for the property market remains uncertain after it posted a $29 million half year loss. The builder posted a $12.8 million profit in the same period last year. The loss for the six months to June 30 was in line with guidance issued late July, when the company warned it would plunge into the red with a net loss of between $27 million and $32 million.
Revenue for the six months dropped 12.5 per cent, to $188 million from the $215 million in the prior corresponding period. The company said it would pay an interim fully-franked dividend of half a cent per share, unchanged from the previous period.
11.05am: Shares in business software company Reckon ran out of puff after their rally on their results earlier in the week, drifting back 1 cent to $2.24 in morning trading.
The shares had rallied from $2.21 at the close Monday, before the release of June half earnings Tuesday morning, which gave some indication it is continuing to offset margin pressures in parts of its business.
Even so, analysts remain on the backfoot in recommending the shares due to concerns about how it will cope once its licensing agreement with Intuit for its accounting software expires.
Macquarie has an 'underperform' on the shares, with a $1.73 price target due to the ongoing uncertainties surrounding the stock, while Goldman Sachs has a 'sell' recommendation, with a 12-month price target of $2.19.
Both brokers are wary of rising competitive pressures facing the company.
Reckon has a buy-back underway, which is likely to place a floor under the shares for a time.
10.58am: The online travel booking service Webjet has posted a 24 per cent rise in annual net profit to $13.6 million despite what it has described as a flat travel market.
Shares in Webjet rose 3 per cent this morning following the release of its full-year profit, which was slightly better than its guidance in April for a $13 million profit. Webjet’s revenue rose 30 per cent to $59 million.
Webjet said it had been able to boost profit in a ‘‘generally flat travel market’’.
The Melbourne company has not given specific guidance for this financial year but highlighted that it boosted total transaction value – the price at which travel products and services were sold – by about 14 per cent in July despite a ‘‘substantially depressed travel market’’.
Webjet will pay a final dividend of 7 cents a share on October 5, taking the payout for the year to 13 cents. It compares with a payout of 11 cents a share in 2010-11.
10.54am: Looking now at the big miners:
- BHP is 1.39% higher to $32.73
- Rio is 2.64% higher to $56.34
- Fortescue is 1.11% higher to $4.57
- Newcrest is 0.12% lower to $24.37
10.49am: Cameron Securities adviser Henry Jennings said resources were performing well at the open after Rio Tinto provided a bullish outlook for China.
‘‘We’ve had some numbers out from Rio that’s really propelling the resource sector, the numbers were slightly better than expected and more importantly they’ve raised the dividend which is going to put pressure on BHP to do the same,’’ he said.
‘‘We’re seeing good gains in resource stocks.’’
10.46am: Consultant Coffey International was a touch higher at 39 cents, up 0.5 cents, in a continued positive reaction to its year to June earnings released yesterday, which contained no surprises. It gained 3 cents yesterday.
‘‘We view the Coffey restructuring as 12 months behind schedule but showing meaingful progress,’’ UBS told clients in a note this morning.
‘‘The stock remains cheap’’, with the shares trading on a 6-7 times earnings multiple, and with direct mining exposure around 20 per cent of revenue.
While the focus remains reducing debt, UBS said it anticipates a 25 per cent dividend payout ratio from the December half earnings.
‘‘We believe with further deleveraging, a return to a dividend and progress with Geosciences [business unit] that the market will re-rate the stock.’’
UBS has a price target of 57c a share.
10.41am: Australian Shareholders' Association director Stephen Mayne just tweeted the following on the News Corp result: How does News Corp justify Rupert's $25m+ salary if he won't even front the quarterly earnings call to discuss this?
10.37am: To the early sliders on the ASX200:
- Flexigroup: -9.97%
- Discovery Metals: -7.66%
- Intrepid Mines: -4.62%
- IOOF: -4.53%
- News Corp B: -3.72%
- Telstra: 2.72%
10.34am: As gains slip back to just 0.1 per cent for the day, here are the best performed companies on the ASX200:
- Bathurst Resources: +6.56%
- Mirabela Nickel: +3.7%
- Aquila: +3.53%
- Iluka: +2.72%
- Beadell Resources: +2.7%
- Rio: +2.42%
10.28am: The ASX200 has eased back to a gain of 0.2 per cent. The telecoms sub index is 2.3 per cent lower, mostly thanks to a 2.27 per cent slide by Telstra following this morning's earnings call.
10.25am: Looking at how the sub indices of the ASX200 are performing:
- Info tech: +1.52%
- Utilities: +0.88%
- Materials: +0.86%
- Health: +0.68%
- Energy: +0.48%
10.20am: CMC chief market strategist Michael McCarthy said Telstra's results met estimates but some investors will be disappointed that the company did not announce a share buy-back or increased dividend.
"We know there is a heap of cash flow on the balance sheet and there is very strong cash flow in the next three years. The market has been speculating there may have been some sort of capital return," he said.
"There was room to move on this one and there will be some people disappointed there has been no capital return," said Mr McCarthy.
10.15am: In early trade, the All Ordinaries index is 12.6 points higher, or 0.3 per cent, to 4345.5, while the benchmark S&P/ASX200 is 13.1 points higher, or 0.3 per cent, to 4325.7.
On the ASX 24, the September share price index futures contract was up four points at 4,284, with 6,704 contracts traded.
10.13am: Tabcorp shares are down 5 cents, or 1.5 per cent, to $3.26.
10.12am: News Corp class B shares are down 56 cents, or 2.5 per cent, to $22.05.
10.10am: Telstra shares are down about 9 cents in early trade, or 2.3 per cent, to $3.88.
10.08am: Rio shares have gained 2.8 per cent, or $1.52, to $56.41 in early trade.
10.06am: Early take - Shares up 0.2 per cent as markets open.
9.57am: In more mining news this morning, the pain from BHP Billiton's shale gas acquisitions continues to emerge, with Petrohawk Energy reporting a $US101 million loss for the six months to June 30.
Petrohawk was BHP's second shale acquisition last year behind the Chesapeake assets that suffered a write-down of just under $US3 billion last week.
BHP paid $US15 billion for Petrohawk in August 2011, which was close to the time Petrohawk reported profits of $US46 million for the six months to June 30, 2011.
But Petrohawk's position has deteriorated significantly since then on the back of slumping gas prices, resulting in a $US101 million loss. Full story.
9.55am: Rio shares could be in the spotlight today after the company reported underlying earnings of $US5.2 billion for the six months to June 30, well below the $US7.8 billion the company reported this time last year. It shares rose 2.77 per cent in US trade overnight. BHP shares added 0.77 per cent.
If you haven't fully digested the Rio news, here's a couple of items from this morning's papers:
9.50am: Also today, China releases CPI data for year to the end of July, with a Bloomberg survey forecasting a 1.7 per cent rise in consumer prices. That would be a slowdown from the year to the end of June, when prices rose 2.2 per cent. A fall in China's inflation could bolster calls for more stimulus for the Chinese economy.
9.48am: Looking ahead now. At 11.30am, the ABS releases July jobs data. A Bloomberg survey of economists expected the unemployment rate to rise for the third month in a row. The survey predicted the jobless rate would climb from 5.2 per cent to 5.3 per cent despite the addition of the 10,000 jobs. The unemployment rate rose from 5.1 per cent to 5.2 per cent in June.
9.45am: Back to Telstra for a moment. Here's a fact which put its strong recent sharemarket performance into context. Telstra shares have been the fourth biggest contributor to the ASX200 this year, behind only Commonwealth Bank, ANZ and Westpac. Its 19 per cent advance prior to today is triple the overall market's gain.
9.41am: Tabcorp Holdings’ net profit has slumped by more than a third in fiscal 2012 but the wagering and gaming firm expects to benefit from several growth opportunities in 2013.
The group’s net profit fell to $340 million in the year to June 30, from $534.8 million in 2010/11, largely as the result of the demerger of its casinos business in 2011.
But, based on continuing operations, the net profit result was 12.7 per cent higher than the $301.6 million recorded in 2011/12, thanks to underlying earnings growth and lower interest expenses following the demerger.
9.38am: News Corp, billionaire Rupert Murdoch’s media company, reported a $1.55 billion ($A1.46 billion) fourth-quarter loss after writing down the value of Australian newspapers and other parts of its global publishing empire.
The net loss was 64 US cents a share, compared with net income of $US683 million, or 26 cents, a year earlier, the New York-based company said today in a statement.
Excluding the writedowns and other items, profit was 32 cents a share, in line with the average analyst estimates. Revenue fell 6.7 per cent to $US8.4 billion during the quarter. Full story.
9.35am: The Telstra numbers are in. Australia’s largest telco said full-year earnings rose 5.4 per cent as it added mobile phone customers while winding down its former monopoly fixed-line business.
Net income climbed to $3.41 billion in the year to June 30, up from $3.2 billion a year earlier, the Melbourne-based company said in a statement. But the result fell short of expectations. Analysts surveyed by Bloomberg forecast net income of $3.5 billion. Full story.
9.32am: Offshore markets gained overnight, technically speaking, but really just held their grounds moreso than climbing for another day. With our futures market up about 0.15 per cent, it's likely that Aussie shares are going to have similarly gentle start.
For a comprehensive look at this morning’s business news, check today’s need2know. Here are this morning’s key market links:
- The SPI was 7 points higher at 4287
- The $A was trading at $US1.0563
- In the US, the S&P500 was flat at 1401.41
- In Europe, the FTSE100 was flat at 5845.92
- Gold added 0.1% to $US1612.35 an ounce
- WTI crude oil lost 32 US cents to $US93.35 a barrel
- RJ/CRB commodities index added 0.15% to 304.32
9.30am: Good morning folks. Welcome to the Markets Live blog for Wednesday.
This blog is not intended as investment advice
BusinessDay with agencies