AFTERNOON REPORT (4.30pm AEST)

Debt concerns in the US and Europe once again rattled local investors, with the Australian share market ending the trading week in the red. Ratings agency Standard & Poor´s today warned there is a one-in-two chance it could cut the United States´ prized triple-A rating if a deal on raising the government´s debt ceiling is not agreed soon. The deadline for the agreement is August 2nd. The All Ordinaries Index (XAO) fell 18.6pts or 0.4pct to 4542.7 while the S&P/ASX 200 Index (XJO) eased by 17.2pts or 0.4pct to 4473.5.

Over the course of the trading week, local stocks fell 3.7pct with Wednesday's gains the only win for the market.

Index leader BHP Billiton (BHP) lost 1.6pct to $42.89. The mining giant today announced a planned $14.3 billion takeover of US gas company Petrohawk Energy. BHP and Petrohawk have agreed to the takeover, although it remains subject to several conditions. BHP will pay US$38.75 for each Petrohawk share, a 49.5pct premium to the average trading price of Petrohawk shares on the New York Stock Exchange over the past 30 days. Also today, close to 3,000 workers at BHP Billiton's coking coal operations in eastern Australia announced plans to increase the length and frequency of rolling strikes at seven mines the mining giant jointly owns with Mitsubishi Corp (listed in Tokyo). Rio Tinto (RIO) shares rose 0.5pct to $81.36.

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A fresh record high gold price saw Australia's largest listed gold producer, Newcrest Mining (NCM) increase its share price by 1.2pct to $40.27.

US crude oil prices fell sharply overnight after Federal Reserve Chairman Ben Bernanke downplayed any potential near term stimulus for the US economy. The energy sector fell 0.8pct on the local market.

Financial stocks were generally lower. Shares in Westpac (WBC) eased by 0.9pct to $20.58 while the ANZ (ANZ) eased by 1pct to $20.78. The Commonwealth Bank (CBA) closed steady at $49.02. A broker upgrade saw Macquarie Group (MQG) shares claw back some of what they have lost this week, MQG firming by 3.9pct to $29.

NewsCorporation (NWS) shares listed in Australian fell back into the red, erasing yesterday's gains. Overnight the FBI announced it will be launching an investigation into claims the company hacked phones of US citizens as the fall-out over the UK hacking scandal intensifies. NWS shares dropped 2.8pct to $14.77.

Flight Centre (FLT) ended up almost 1pct $21.40. The travel company today upgraded its pretax profit to between $243 to $247 million as its business benefits from the strong Australian dollar and low international airfares.

Among the airline stocks, Qantas (QAN) rose 0.8pct to $1.84 while Virgin Blue eased 4.8pct to $0.295. The Civil Aviation Safety Authority (CASA) today lifted the suspension on Tiger Airways' ban, meaning the budget carrier can resume services from August 1 if all its safety issues are fixed.

No economic data was released locally today, and the Australian dollar ended the day's trade at US106.97c, £0.6618 and €75.54c.

On the market overall, a total of 1.9 billion shares were traded, worth $5.1 billion. 401 were up, 606 were down and 369 were unchanged.

At 4.30pm AEST on the ASX24, the futures contract was at 4441, down 26pts.

Tonight in the US, the Labor Department releases the June consumer price index data, the nation's most common read of inflation. Economists are looking for CPI to have fallen by 0.1pct versus the 0.2pct gain in May. June industrial production figures, the July reading on the University of Michigan consumer sentiment index and the Empire State Manufacturing Index are also released. Citigroup and toy maker Mattel are slated to report their latest quarterly earnings.

(From Juliette Saly, CommSec Market Analyst)

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