Markets Live: Miners lead ASX slump

3.57pm: Looking at the dollar, Tim Waterer says US jobs numbers, to be announced overnight, will set the tone of the Australian currency.

"After making a break for 1.06 (hitting a high of 1.0580) the AUD has followed the retreat of equity markets and the Euro to sit below 1.05 again. During Asian trading hours today, the AUDUSD rate spent much of its time in the 1.0450-1.0470 range with further break-out moves on hold until we navigate past US Non-Farm Payrolls data. The result of the US jobs numbers and the implications for the potential unveiling of QE3 will be the chief driver of financial markets to round out the week. US equity market reaction to the jobs data will set the tone for whether the AUD follows risk assets higher and make a push for 1.0550 or retreats to 1.0390."

3.50pm: Australia's TRUenergy, a wholly owned unit of Hong Kong-listed power utility CLP Holdings , could delay its IPO and cut the size from the earlier planned $3 billion if markets weaken, two sources with direct knowledge of the matter said.

The initial public offering, slated to be Australia's biggest in about two years, could be pushed back to the first quarter of 2013 from the November date targeted earlier, the sources said, adding the $3 billion sought to be raised from the planned IPO was high under current market conditions.

The size could fall to between $2 billion and $2.5 billion, one of the sources said. The sources declined to be named as the deal is confidential.

3.38pm: With minutes to go before the close of trade, here's what CMC Markets senior trader Tim Waterer had to say about the day's action:

• The ECB press conference came and went with more of the same good intentions that Draghi signalled last week. However financial markets are in need of deeds not just words, which is why traders feel none the wiser today about a resolution timeline on Europe. The result was a predictable pull-back from Risk assets.
• While action from the ECB will still likely happen in coming months, financial markets are not known for their patience and the lack of immediate action was inevitably met with some petulance by traders. Not surprising then that the US Dollar was again a favourite with investors given disappointment from the ECB, with the Euro, gold and oil all giving up ground as a result of the stronger Greenback.
• Given the disappointment surrounding the FOMC and ECB meetings this week, market patience could be stretched to breaking point if US employment numbers miss the mark to the low side. If we see another sub 100k result the chorus of QE3 supporters will grow if jobs data signals that the US economy is close to stalling.
• There was not much joy for the Australian sharemarket to end the week, with a pullback in commodity prices resulting from the ECB non-action being of particular burden to our large-cap mining stocks such as RIO and BHP. In addition, the write-downs on BHP did little in the way of improving the performance of the Materials sector today, while oil stocks felt the effects of a decline in the price of crude overnight. Overall, the Australian market performance was in line with the global feeling of discontent stemming from ECB inaction.

3.28pm: The losers for the day look to be the miners:

• Iluka Resources: -4.54%
• Rio: -4.28%
• Fortesque: -4.12%
• BHP: -2.34%
• NewCrest: -2.08%

3.16pm: Here's an interesting piece from BusinessDay's Michael Pascoe: China reaction: fire, ready, aim!

There's already been too much written about Olympic medals or the lack thereof, but there's a little symbolism on offer of something much bigger than one smallish country's pre-occupation with disproportionate sporting success.

Never mind the minor placing, a sign of the changing times is the tussle between the US and China for the top position. The US is still the world's major sporting power, but China's rise is inexorable. Yet to come is the track and field – perhaps a metaphor for military spending – where the US outpaces China, but the momentum is with China.

And so it is with the economic competition. The IMF has China's GDP slated to overtake the US on a purchasing power parity basis in 2017 - the year after the next Olympics.

That's the big picture that counts most for us and the rest of the world, a picture that doesn't change with any one or two months' numbers. Just don't try to tell that to the instant experts and screen jockeys whose rules of engagement work on the fire, ready, aim protocol.

3.04pm: The latest story from Marco Investor is in: House prices running on empty.

Let's start with what obsesses us most: house prices!

This week the Australian Bureau of Statistics (ABS) released its June quarter house price index and although it showed prices falling in Melbourne, Hobart and Canberra the national aggregate rose 0.5 per cent as Sydney and Darwin took off.

Running with the national number, ostensibly this outcome is what you might expect given the sequence of generous interest rate cuts that have been offered up in the last six months.

2.56pm: Here's something interesting from the small business desk:

For an ethical boss, being falsely accused of harassment can be one of the most confronting and demoralising things to deal with at work, writes James Adonis.

Click here for the full story.

2.47pm: Here's a snap shot of how markets around the region are performing:

• Nikkei(Japan): -1.23%
• Shanghai: +0.4%
• Taiwan: -0.94%
• South Korea: -1.27%
• Singapore: -0.12%
• New Zealand: -0.33%

2.32pm: More from Malcolm Maiden on BHP's shale gas writedown... The mining giant's chief executive Marius Kloppers is confident that he and his top managers have the board's support despite booking asset write-downs totalling $US3.3 billion, including a $US2.84 billion write-down of shale gas tenements in the United States acquired in February last year for $US4.6 billion.

Comments by BHP chairman Jac Nasser that accompanied the write-down announcement were a statement of support for him, his senior management team including BHP’s petroleum boss, Mike Yeager and the group’s expansion into shale last year, Mr Kloppers said.

More here.

2.16pm: Facebook co-founder Mark Zuckerberg is no longer among the world’s 10 richest technology billionaires, Bloomberg reports.

The 28-year-old’s fortune dropped by $US423 million on Thursday as shares of the world’s largest social media company fell 4 per cent to $US20.04, a record low.

Zuckerberg is now worth $US10.2 billion. He is about $4US00 million behind James Goodnight, the co-founder of software maker SAS Institute, who now ranks as technology’s 10th-richest person, according to the Bloomberg Billionaires Index.

“From an emotional standpoint, he might care,” says Ron Florance, managing director of investment strategy for Wells Fargo Private Bank.

“He’s much more worried about maintaining Facebook’s market share in the social media space than the day-to-day valuation swings of his company stock. He’s not worried about going broke.”

Facebook shares have fallen 47 per cent from their IPO price of $38.

2.06pm: Ratings agency Standard and Poor's has reaffirmed New Zealand's AA rating with a stable outlook, but warns there might be renewed pressure if the country's external debt levels were to deteriorate further.

A year after S&P cut New Zealand's ratings a notch, it said the current level was appropriate given the economy's outlook, fiscal strength, and the strength of its banks, which countered the threats from high external debt and vulnerable commodity markets.

"The stable outlook balances the stabilisation we expect between the government's debt profile over the medium term and the risks associated with the country's high external debt," says S&P's sovereign analyst Kyran Curry.

1.54pm: Brent crude has inched above $US106 a barrel on concerns over supply from the Middle East and the North Sea, though worries over a slowing global economy capped gains.

The US Congress passed a new package of sanctions against Iran that aims to punish banks, insurance companies and shippers that help Tehran sell its oil.

This builds on oil trade sanctions signed into law in December that prompted buyers in Japan, South Korea, India and others to slash their purchases of Iranian oil.

Brent crude had gained 43 cents to $US106.33 per barrel, while US crude rose 36 cents to $US87.49. Both prices are on track for their second weekly loss.

1.47pm: Here's a piece from the team at Drive... New vehicle sales remained strong in July thanks, in part, to the mining industry.

Sales for July are up 7 per cent over the same month last year and the industry remains on track for another year of more than one million new vehicles sales.

The July figures underline the continuing success of utes and SUVs, with both segments up more than 20 per cent over the same period in 2011.

The Toyota HiLux ute continues to be Australia's most popular vehicle, for the fourth month in succession, and is joined in the top 10 by both the Nissan Navara and Ford Ranger workhorses.

1.42pm: The responsible entity for takeover target Hastings Diversified Utilities Fund (HDF) has stuck by its recommendation that securityholders accept an offer from Pipeline Partners Australia (PPA).

Energy Infrastructure investor Hastings is subject to two takeover offers: an all-cash offer from PPA and a cash-and-scrip offer from APA Group.

Hastings Funds Management Ltd (HFML), the responsible entity for HDF, has released Hasting’s target’s statement in response to the PPA offer.

1.28pm: Both the All Ords and the ASX200 are back to a loss of 0.9 per cent, roughly in line with Hong Kong (-0.89 per cent) but not as far down as Japan (-1.6 per cent).

The big banks are down but performing solidly in a weak market:

• CBA is 0.8% lower to $56.14
• ANZ is 0.3% lower to $23.44
• NAB is 0.48% lower to $25.03
• Westpac is 0.7% lower to $23.37

1.23pm: The big miners, along with other resources stocks, look like finishing the week on a very low note:

• BHP is 2.1% lower to $31.35
• Rio is 3.86% lower to $52.31
• Fortescue is 4.12% lower to $4.19

1.09pm: If you're looking for something to read over your salad sandwich, here's a swashbuckling tale from Michael West about buried treasure, deadly toxins and a now-abandoned mine:

The life of the Tasmania Mine at Beaconsfield seems destined to end in controversy. It was first mined during the Gold Rush years of the 19th century, was closed at the outset of the First World War in 1914 and did not reopen again until 1999.

The Beaconsfield mine has produced 1.95 million ounces of gold over the years, worth more than $3 billion at today's gold prices, and its resources remain “open at depth”.

The deepest drill intersection grades 32.4 grams of gold, over 1.0 ounce of gold, per tonne.
Yet now, with no resistance from government or regulators, management is preparing to dump 300,000 tonnes of tailings - mining leftovers thick with arsenic, cyanide and other toxins - straight back into the underground mine itself, risking ultimately poisonous seepage into the water table. Full story.

1.05pm: Shares in Japanese electronics giant Sharp have plunged 30 per cent in Tokyo trade, a day after saying it would cut 5000 jobs and reported a huge quarterly loss. The stock dropped to 187 yen after Sharp said it lost Y138.4 billion ($1.7 billion) yen in the April-June quarter, nearly three times more than the same quarter last year.

The company, which has seen its mainstay television, liquid crystal display and solar panel products struggle, said the job reductions were part of a bid to cut fixed costs by 100 billion yen to help its dented balance sheet. Sharp currently employs 57,000 people globally.

1.03pm: The materials sector is leading the market lower today with a loss of 2.36 per cent. Here are some of the biggest sliders on that sub-index:

• Intrepid Mines: -9.46%
• Gryphon Minerals: -5.26%
• Arrium: -4.49%
• Lynas Corp: -4.24%
• Sims metals Management: -4.16%
• Rio: -4.14%
• Fortescue: -3.89%

12.38pm: Jamie Elgar, an adviser with Burrell Stockbroking, said mining companies are unlikely to regain significant territory on Friday.

‘‘The resource companies are likely to take their cue from the US futures market later on,’’ Mr Elgar said.

‘‘The main thing for the market is that we’ve had a big run-up this week on the expectations that the ECB would do something and that didn’t happen,’’ Mr Elgar said.

12.24pm: Here’s a follow-up to a dramatic story from yesterday. Wall Street firm Knight Capital is fighting for survival after a $US440 million trading loss caused by a software glitch wiped out much of its capital, forcing Knight to seek new funding as its shares plunged as much as 80 per cent in two days.

Many of the company's biggest customers stopped routing orders through Knight. One of the biggest fears is that the company will collapse, landing trading clients and creditors with losses.

"They have about 48 hours to shore up confidence," said James Koutoulas, head of an advocacy group for former customers of failed brokerages MF Global and Peregrine Financial.

To read more about electronic trading, flash crashes and Australia, read Malcolm Maiden’s column from this morning.

12.15pm: Everyone’s buying an SUV. That’s the message from some fresh data on sales of new vehicles in Australia. Overall sales were up 7 percent in July, compared to the same month last year, led by big gains in the sports utility sector.

The Australian Federal Chamber of Automotive Industries VFACTS report showed total vehicle sales in July were 86,641, compared to 80,991 in July last year.

Sales were down 29.9 per cent on June but that is typically a very strong month as dealers cut prices for the end of the financial year. Adjusted for seasonal factors, VFACTS estimated sales rose 0.8 per cent in July, from June.

12.08pm: Here's how a few of the companies in the news today are faring:

• BHP: down 65 cents, or 2.03 per cent, at $31.37
  BHP Billiton has had to write down the value of its American shale gas assets by $US2.84 billion ($A2.73 billion)

• CSL: down 81 cents, or 1.96 per cent, at $40.54
  The head of blood products and vaccines maker CSL will leave the company in 2013 after 23 years in the job.

• RMD: up 25.5 cents, or 8.44 per cent, at $3.275
  Sleep disorder equipment supplier ResMed’s annual profit is up 12 per cent due to stronger revenue in the United States.

11.59am: Here's a few lines from analysts at NAB on the ECB's efforts overnight:

Our economic colleagues have called it a bronze medal effort by the ECB. Our thoughts are that it’s still a bit early to call their actions successful (assuming a bronze or a silver is still a good result – which Australia’s swim team is now coming to accept) and until they get Germany onside with what they [intend] to do, they are unlikely to get the podium result they and markets are desperately after. The ECB medalling in Rio (2016) might be a more realistic expectation.

11.54am: Here’s an interesting one. A common enough play in retail, only this time the 'cut prices, boost demand' ploy has been applied to the Chinese stockmarket.

Chinese regulators, seeking to arrest a 14 per cent slide in the nation’s stock market since this year’s high on March 2, reduced transaction fees on equities trading by 20 per cent.

The reduction will take effect Sept. 1 and save investors 600 million yuan ($US94 million) in transaction-related fees in the final four months of the year, the China Securities Regulatory Commission said on its website.

Separately, the official Xinhua News Agency said that China was also considering a cut in stamp duty on share trading.

11.41am: Gold is trading little changed, struggling to recover from a four-day losing streak after the European Central Bank stopped short of offering any immediate aid to contain the region's debt crisis, while caution has prevailed ahead of a key US jobs report.

Spot gold is at $US1588.66 an ounce.

11.37am: The Tokyo Stock Exchange says it has approved the relisting of Japan Airlines (JAL), the flag-carrier that went bust in one of the nation's biggest-ever bankruptcies more than two years ago.

JAL, which went bankrupt in January 2010 and its shares delisted the following month with debts totalling 2.32 trillion yen ($29 billion), is to list again on September 19, the exchange says.

The airline continued to fly during its period off the stock exchange and undertook an overhaul that included massive job and route cuts.

11.33am: Among the sectors, the miners are down 2.3 per cent, industrials are 1.2 per cent down and the financials index has fallen 0.5 per cent.

11.30am: As the graph above shows, shares are off their lows - but are still well down for the session. The ASX200 is down 40.7 points, or 1 per cent, to 4228.8. Earlier the index went as low at 4212.8.

11.25am: Real estate and mining mogul Clive Palmer has unveiled plans for a multi-billion-dollar casino complex, including an international airport and hovercraft port, at his Coolum Palmer Resort on the Sunshine Coast.

A trademark for the name Coolum Casino and the domain name www.coolumcasino.com.au were registered in March, leading to speculation the billionaire was planning a casino.

The ambitious scheme unveiled on Friday includes a casino, plus a hovercraft station, an international airport, and convention centre, along with water, beachside amusement and wildlife parks, and a hotel with thousands of rooms and an aquarium.

A hovercraft, with a capacity to hold 400, would ferry tourists to and from Brisbane and the Moreton Bay islands.

11.17am: Commonwealth Bank has appointed an ex-CommSec executive to head its retail banking services business, Chris Zappone reports.

Matt Comyn will take over as group executive Retail Banking Services from August 10, stepping into the role left open by Ross McEwan in May.

Mr Comyn, who joined CBA in 1999 and most recently oversaw its local business banking operations, spent four years at the helm of online brokerage CommSec, where he managed the modernisation of its trading platform.

“Through his various roles in the group, Matt has demonstrated high integrity, a strong focus on our people and customers, a deep understanding of the application of technology to financial services, and broad strategic vision,” says CBA chief executive Ian Narev.

11.13am: More on Oil Search... its shares have dropped after it revealed its PNG loading operations had been suspended following a minor oil spill more than a week ago.

Its shares are down 10 cents, or 1.41 per cent, to $6.97.

11.06am: IG Markets broker Chris Weston says the Australian market has followed overseas leads as local investors come to terms with the ECB taking no immediate action.

‘‘We’ve got some repositioning after people built up their expectations on how the ECB would act and, obviously, people are a little bit disappointed by the inaction of the central bank,’’ he says.

10.52am: BusinessDay’s Malcolm Maiden says today's shale writedown is not a company-killing one for BHP, even when combined with the $450 million writedown BHP is also taking on its nickel business. The group is going to report a profit for the year to June 30 of about $US17 billion in a few weeks' time. He writes:

It is nevertheless an embarrassment for BHP, and its chief executive, Marius Kloppers, and BHP's petroleum boss, Mike Yeager, in particular. Jac Nasser said this morning that BHP was "fortunate to have Marius's leadership," and the "strong management team" he leads.

Any more mistakes and speculation about Kloppers' tenure will become intense, however. More here.

10.45am: Three of the four big banks are slightly ahead of the general market, which has slumped to an early loss of 1.2 per cent now:

• CBA is 0.48% lower to $56.32
• ANZ is 0.89% lower to $23.29
• NAB is 0.97% lower to $24.91
• Westpac is 1.23% lower to $23.24

10.41am: Depsite BHP making the headlines this morning with a big writedown, Rio shares are the ones taking the worst beating among the big miners:

• BHP is 0.65% lower to $31.37
• Rio is 4% lower to $52.22
• Fortescue is 3.55% lower to $4.22

10.36am: Amid the gloom, here are the best performed companies on the ASX200:

• Resmed: +7.28%
• Saracen: +2.53%
• Billabong: +1.45%
• Centro Retail: +1%
• DuluxGroup: +0.62%

10.33am: Here are the early sliders on the AX200:

• Boart Longyear: -5.49%
• Pacific Brands: -4.55%
• Panaust: -4.1%
• Bradken: -4.01%
• Arrium: -3.85%

10.28am: Shares in Sonic Healthcare have fallen in early trade after the competition regulator said it was its preliminary view that Sonic's $100 million takeover of various Healthscope pathology businesses might raise competition concerns.

Just after market open, the pathology company's shares are down 2 cents to $12.68, in line with a weaker sharemarket.

In a statement of issues released yesterday, the Australian Competition and Consumer Commission said Sonic's proposed takeover of Healthscope’s pathology businesses in Queensland, NSW, ACT and Western Australia could ‘‘remove an effective competitor in the provision of community pathology services’’ in those areas.

10.24am: Fat Prophets resource analyst David Lennox said the BHP write-down was a little more than expected and would have an effect on the company's profits.

"The $US2.8 billion may have been a little higher than the market expected," he said, with analysts looking for a $US2 billion write-down. The headline number will be impacted," he said.

"Their reported profits will be lower for the full-year. BHP will have the same problem in a number of divisions, including their base metals, such as copper and zinc," he said. Full story.

10.20am: All sectors of the ASX200 are lower:

• Materials: -1.73%
• Energy: -1.17%
• Industrials: -1.05%
• Consumer staples: -0.82%
• Health: -0.8%
• Financials: -0.74%

10.15pm: Oil Search’s loading operations in Papua New Guinea remain suspended after an oil spill that occurred more than a week ago.

In what Oil Search has described as a minor spill, oil droplets were seen on the sea surface next to the Kumul Marine Terminal during loading of a tanker on July 26. Loading was suspended and, due to unfavourable weather, an inspection of the loading line is yet to be carried out, Oil Search said in a statement.

10.12am: In early trade, the All Ordinaries index is 38.7 points lower, or 0.9 per cent, to 4250.4, while the benchmark S&P/ASX200 is 41.1 points lower, or 1 per cent, to 4228.4.

10.08am: Early take: with almost all companies trading, stocks are about 0.75 per cent lower.

10.07am: The head of blood products and vaccines maker CSL will leave the company in 2013 after 23 years in the job. Brian McNamee will step down as chief executive in July 2013, and replaced by internal candidate Paul Perreault, CSL said.

‘‘Brian will run the business as normal giving us the continued benefit of his leadership right up to the hand-over mid next year,’’ CSL chairman John Shine said in a statement today.

Professor Shine paid tribute to Dr McNamara’s long tenure at CSL. ‘‘When Brian took over in 1990, CSL was a domestic-focused government enterprise,’’ he said.

10.04am: It's early days but BHP shares are down 71 cents, or 2.2 per cent, to $31.31.

10am: More on BHP. The total writedown is closer to $US3.3 billion - $US2.84 writedown on the value of the US Fayetteville shale gas assets it bought in 2011 and a further $US450 million writedown for Australian nickel assets.

Analysts had been expecting a writedown of at least $US3 billion for BHP's natural gas assets, bought for a total of $US17 billion when US gas prices were far above current levels.

BHP said the value of its onshore US shale liquids and gas assets acquired with Petrohawk Energy were not affected by the writedown.

BHP Chief Executive Marius Kloppers and petroleum head Mike Yeager had requested they not be considered for a bonus in 2012, the company added.

9.57am: Sleep disorder equipment supplier ResMed’s annual profit is up 12 per cent due to stronger revenue in the United States.

The California-based company posted a net profit of $254.9 million in the year to June 30, up from $227 million in the previous year. Profit in the final three months of the financial year was up 31 per cent from the previous corresponding period to $76.8 million.

ResMed said revenue from its Americas operations increased by 13 per cent in the final quarter of the financial year, while revenue in the remainder of the business increased by three per cent.

9.53am: If sharemarkets continue to plummet following last night’s disappointing meeting from the ECB, at least one leading currency analyst reckons the gloom is misguided.

Here’s what Westpac’s chief currency strategist Robert Rennie told BusinessDay before last night’s meeting: ‘‘I don’t think we’ll get a big bang from Draghi tonight. I think we’ll be underwhelmed, but I think we will misunderstand the implication of what is going on here.’’

Rennie predicted that Draghi’s hands would be tied until Germany’s Constitution Court meets on September 12 to decide whether the ECB’s new tools to fight stagnation comply with German law.

‘‘If I might be slightly unfair and make the point that European have tended to over-promise and under-deliver, I don’t think that you can say that of Draghi,’’ Rennie said.

‘‘On his first policy meeting that he chaired he cut rates ... in July this year he did what the Fed has not even dared to do - he cut the deposit rate to zero.’’

Draghi’s problem, Rennie believes, is timing not resolve.

9.48am: BREAKING BHP Billiton has had to write down the value of its American shale gas assets by $US2.84 billion ($A2.73 billion).

A glut of gas supply in the United States and subsequent low gas prices there forced the world’s biggest resources company to take massive impairment. BHP will write down the value of the Fayetteville shale gas assets that it acquired from Chesapeake Energy in February 2011. More on this as it comes to hand.

BHP shares were flat in US trade overnight.

9.43am: It's fair to say that central bank inaction has been the story of this week. First the Fed said they were considering how to get the US economy moving again but announced no new measures, then last night the ECB did more or less the same thing, albeit offering an outline of steps it could take in the short to medium term.

But investors were unimpressed, and that bronx cheer looks set to hit Aussie shares today. Check out this story for some background on the ECB's action, or lack thereof, from overnight.

9.37am: The disappointment surrounding the ECB's lack of action, despite foreshadowing action in the coming weeks or months, is likely hit investor sentiment here. Europe markets fell hard, with Spain losing more than 5 per cent and Italy down from than 4.5 per cent, while more moderate losses were recorded on Wall Street.

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

• SPI futures are 28 points lower at 4200
• The $A is lower at $US1.0463
• In the US, the S&P500 fell 0.75% 1365
• In Europe, the FTSE100 fell 0.88% to 5662.30
• Gold fell $14.40 to $US1690.70 an ounce
• WTI crude oil fell $1.60 to $US87.31 a barrel
• Reuters/Jefferies CRB index fell 1.58% to 294.50

9.35am: Good morning everyone. It's Friday! Welcome to the Markets Live blog.

This blog is not intended as investment advice

BusinessDay with agencies