Local stocks closed in the red for the sixth session in a row today, posting the Australian share market's longest losing streak since November last year. Weaker than expected jobs numbers hurt investor sentiment while falls on US share markets and reports China is considering reducing state steel output contributed to the negative tone. The All Ordinaries Index (XAO) closed down 29pts or 0.7pct to 4106.
The main indicator of the Australian Securities Exchange (bottom R) is seen in red shortly after the local market opened in Central Sydney October 4, 2011. Australian stocks eased 0.6 percent on Tuesday, pressured by falls in global equities markets in a fresh flight from riskier assets, but losses were limited after steep declines on Monday. REUTERS/Daniel Munoz (AUSTRALIA - Tags: BUSINESS)
Material stocks were the worst performers. Base metals prices were mixed in London on Wednesday night after the minutes from the US Federal Reserve's meeting showed a further global economic slowdown would be required before policy makers inject more stimulus. Meanwhile in Asia, there was a report China is set to reduce state steel production by 12 million tonnes per year. Shares in mining giant BHP Billiton (BHP) fell 2.1pct to $30.40 while Rio Tinto (RIO) was off 2.5pct to $54.25 Iron ore miner Fortescue Metals Group (FMG) closed down 6.1pct to $4.62.
Telstra (TLS) today announced it was selling its New Zealand subsidiary TelstraClear to Vodafone for NZ$840 million. The telco plans to inject more than half the cash it pockets from the sale into its Australian business through the use of a special dividend. However Telstra is expected to take a $130 million foreign exchange hit in both the 2012 and 2013 financial years. Telstra closed slightly in the red today after hitting a fresh three and a half year high yesterday. TLS lower by 0.3pct to $3.85.
In the retail space, Myer Limited (MYR) announced it would be cutting 100 back office jobs due to tough trading conditions across the retail sector and higher costs facing the company. In a statement, Myer CEO Bernie Brookes said "We have undertaken a major review of all support function expenditure, including services provided, marketing and events, IT, HR (human resources), merchandise and supply chain with a view to rebasing our cost structure to align to the operating conditions we face." Myer shares closed down 0.9pct to $1.66 while David Jones (DJS) was lower by 0.9pct to $2.33.
Elsewhere today, toll road develop Transurban (TCL); which operates Victoria's CityLink along with Sydney's M2, Lane Cove Tunnel, Eastern Distributor, M7 and M5 motorways, lifted its annual toll revenue by nearly 6pct to $943.9 million. Transurban said the result was partly driven by strong revenue growth from its CityLink toll road in Melbourne, where traffic volumes were up 1.6pct. Sydney's M2 continues to be impacted by road works, with traffic there down 3.8pct. TCL says 70pct of the M2 upgrade is now complete. TCL shares today rose 2.6pct to $5.83.
Economic data released today showed employment fell by 27,000 in June after a revised 27,900 (previously 38,900 in May). Economists had expected a flat result. In June, part-time jobs rose by 6,600 after falling by 8,600 in May. Full-time jobs fell by 33,500 after rising by 36,400 in May. The unemployment rate rose from 5.1pct to 5.2pct in June. The participation rate eased from 65.4pct to 65.2pct.
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