Australian Stock Market Report - Midday 20 June 2011
Despite a positive start, Australian stocks closed at a near 10 month low today as markets around the Asian region tumbled after European governments failed to agree on a new bailout package for Greece. A profit downgrade from Caltex (CTX) and a weaker oil price had a huge impact on the energy sector, which was the biggest drag on the overall share market. The benchmark S&P/ASX 200 Index (XJO) fell 38.6pts or 0.9pct to 4512.5, while the broader All Ordinaries Index (XAO) lost 33.2pts or 0.7pct to 4451.7.
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Caltex shares dropped 6.9pct to $10.60 after the oil refiner indicated its 1H profit would come in between $110 to $115 million, down 39pct from last year’s $163 million due to higher oil prices and a number of refinery outages.
Crude oil prices fell 6.2pct over the course of last week to end New York’s Friday session at US$93.01. Late in Asian trade, the oil price had slipped further, down US$1.28 to US$91.73 a barrel. The energy sector was the worst performing on our market today, falling 2.1pct. Shares in Woodside Petroleum (WPL), fell a further 2.2pct to $39.91, adding to Friday’s losses. On Friday, WPL was one of the worst performers on the market, after announcing delays and a cost blow-out to its Pluto gas project off Western Australia. Shares in Santos (STO) eased by 1.8pct to $13.14 while Oilsearch (OSH) fell 1.4pct to $6.56.
Mining players fared little better, with the materials sector down 1.4pct. Index leader BHP Billiton (BHP) fell 1.4pct to $41.36 as it announced operations at its Escondida mine in Chile had been halted due to heavy snow and rain impacting copper production. Rival Rio Tinto (RIO) eased by 0.7pct to $77.30 while Australia’s largest listed gold producer, Newcrest Mining (NCM) fell 1.2pct to $36.13 despite a rise in the precious metal.
Financial stocks lost ground in afternoon trade, with the National Australia Bank (NAB) the best performer, up 0.3pct to $24.44.
Construction giant Leighton Holdings (LEI) has been awarded a $130 million contract to build the Mumbida wind farm south-east of Geraldton in Western Australia. LEI shares fell 1.6pct to $20.67.
Shares in Sydney Airports owner Macquarie Airports (MAP) rose 1.9pct to $3.27 after announcing a 4.2pct lift in overall passenger numbers in May. International travel was up 7.8pct over the same period.
Virgin Blue Australia (VBA) closed down 1.8pct to $0.28. The airline announced in late afternoon trade that it would be suspending flights to Adelaide and Mildura tomorrow as dust from the Chilean volcano eruption returns. Qantas shares were steady at $1.82.
Internet provider iiNet Limited (IIN) fell 6pct to $2.68 after its major shareholder Amcom Telecommunications sold down its stake in the company. Amcom had held 23.4pct or 35.5 million shares in iiNet, and sold 4.5 million on Friday. Amcom will be distributing the remaining 31 million shares amongst its shareholders. iiNet today welcomed Amcom’s decision, describing the move as logical.
In economic data today, the national average Australian price of unleaded petrol rose by 1.1 cents per litre to 140.2 cents a litre in the week to June 19. Global oil prices recorded sharp fall in the past week which should translate into lower pump prices in a fortnight’s time. The Singapore unleaded price fell by almost US$7 a barrel in the past fortnight. CommSec
expects pump prices to fall by around 3-5 cents a litre in a fortnight’s time. Since the peak on May 10, the national average wholesale (terminal gate) price has fallen by 6.5 cents a litre while the national retail price has fallen by 5.7 cents.
The Australian dollar ended the day’s trade weaker against the greenback and at 4pm AEST was worth US105.51c, £0.6543 and €74.11c.
On the market overall, a total of 2.38 billion shares were traded, worth $4.76 billion. 331 were up, 876 were down and 376 were unchanged.
At 4.30pm AEST on the ASX24, the futures contract was at 4440, down 39pts.
There is no economic data slated for release in the US tonight.
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