ASX 200 recovers from early selling
There were mixed signals out of the US session overnight. Better than expected growth figures were balanced by the US Fed's view on inflation with the central bank indicating that the risk of lower inflation has diminished. This came in the change to the FOMC statement which revised down the risks of inflation remaining below the 2.0% target with the banks saying "the likelihood of inflation running persistently below 2% has diminished somewhat". Whilst only a small one, it was a step closer to an eventual rate rise. The flat finish for US stocks translated to a similar open for the local bourse, although the market recovered over the course of the morning..
Rio Tinto (RIO) announced after the close of trade on Wednesday that it had agreed to sell its Mozambique coal assets to an Indian investment group for $50 million. The business was acquired in 2011 through the $3.7 billion takeover of Riversdale Mining Ltd. Rio expects to complete the sale of its Benga coal mine and other projects in the Tete province of Mozambique before the end of September. Last year RIO took a $2.9 billion impairment charge against the business after the construction of required infrastructure proved more difficult than originally estimated.
Doubts have emerged over the supposed success of
Woodside Petroleum's (WPL) plan to buy most of Royal Dutch Shell's interest in the company. A sizeable number of investors are opposed the transaction with the group saying that 71.3% of its shareholders who voted by proxy have approved the transaction although this number is below the minimum threshold for approval of 75%.
Approximately 59% of its shareholders have voted by proxy which means an opportunity remains for the deal to get approval at a shareholder meeting in Perth on Friday. The remaining 41% of shareholders who haven't voted can do so at the meeting although voting isn't compulsory.
Figures released from the ABS showed that approvals to build or renovate houses and apartments fell 5.0% in April after rising 10.3% the month earlier. Permits to build private houses fell 2.2% from a month earlier, while approvals for private apartments, townhouses and other dwellings fell 10.5%.
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