Australia Stock Market Report - Closing 08/04/2011
AFTERNOON REPORT
(4.30pm AEST)
The local share market came under more selling pressure today, falling to 13 month lows as investors fretted over the health of the global economy and as a fall in tourism arrivals showed our strong dollar is continuing to have a negative impact on parts of our economy. Key US jobs data due out tomorrow night also kept many out of the market, with institutional buyers not willing to commit until it's clear how many jobs the world's biggest economy added in July. The All Ordinaries Index (XAO) fell 55.4pts or 1.3pct to 4352.9 while the S&P/ASX 200 Index (XJO) eased by 56.3pts or 1.3pct to 4276.5.
After the bell, mining giant Rio Tinto posted first half results, which came in slightly under expectations. RIO's 1H profit rose 30pct to US$7.6 billion, versus expectations of $8billion. Its dividend payment of 54c per share was in line with what the market was looking for. RIO shares started the day's trade in positive territory, but closed down 1.3pct to $76.58.
Index leader BHP Billiton (BHP) closed down 0.2pct to $40.06.
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The world's fourth largest uranium producer Energy Resources Australia (ERA) fell 9.7pct to $3.92 after posting a first half loss. ERA posted a net loss of $121.8 million for the six months to June after suspending operations at its Ranger Mine on above average rainfall.
Meanwhile toll road operator Transurban (TCL) beat market expectations with a near 90pct lift in annual profit to $112.5 million, thanks to a 10pct increase in toll revenue. The strong revenue growth and lower costs allowed the company to raise its dividend, paying 27 cents per security for the year to June 30, up from 24 cents in the previous year. TCL shares fell 0.8pct to $5.07.
Construction giant Leighton Holdings (LEI) improved its earning guidance, sending its share price higher in early trade. However the company still expects to post an after-tax FY loss of around $408 million, better than the $427 million loss that it flagged in April. LEI closed down 0.4pct to $20.
Toll Holdings (TOL) today announced Chief Financial Officer Brian Kruger will become the company's new Managing Director in January following the retirement of Paul Little. TOL shares fell 0.7pct to $4.41 as investors waited to hear who would take over the financial reigns of the freight operator.
Shares in Australia's largest gold miner Newcrest Mining (NCM) fell 0.3pct to $40.65 on confirmation two of its Australia workers died in a helicopter crash in Indonesia, along with approximately 8 locals.
A decision by the Bank of Japan to intervene in currency markets saw the Australian dollar lose further ground against the greenback. Japan's Finance Minister Yoshihiko Noda said a strong yen could hurt the economy and slow Japan's efforts to recover from the March earthquake and tsunami. A strong yen is harmful to the Japanese economy because it reduces the value of foreign earnings for companies that export cars, electronics and other manufactured goods.
The Australian dollar ended the day's session at US106.51c, £0.6514 and €74.6c. It was also buying 84.61 Japanese Yen, up 2.1pct.
Economic data released today shows the tourism gap has hit record levels. In June, the gap between tourist departures and tourist arrivals was the largest ever recorded. In the month 727,100 Aussies travelled abroad for business or pleasure but only 390,100 tourists came to Australia. Tourist arrivals and departures both fell in June in seasonally adjusted terms (affected by the ash cloud). Tourist arrivals fell for the fifth time in six months, easing by 2.6pct in June. Tourist departures also surprisingly fell in June, down 1.3pct, the fourth decline in five months. An estimated one in three Australians travelled overseas in 2010/11. There were 7.44 million tourist departures last financial year, up 9.9pct on a year ago. There were a record number of people travelling to or from Australia in 2010/11. Total overseas arrivals and departures totalled 27.7 million trips, up 7.1pct on a year ago.
On the market overall, a total of 2.6 billion shares were traded, worth $6.15 billion. 329 were up, 720 were down and 365 were unchanged.
At 4.30pm AEST on the ASX24, the futures contract was at 4242, down 42pts.
Ahead tonight, weekly jobless claims data is released in the US. Dow component Kraft foods reports earnings after the bell while insurance company AIG is also slated to release profit results.
(From Juliette Saly, CommSec Market Analyst)
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