MID-SESSION REPORT (12.15pm AEST)
The Australian sharemarket is losing ground for the third time this week, with almost all sectors in the red at lunch. The All Ordinaries Index (XAO) is down by 0.5 per cent, taking some of the shine off yesterday's 1.5 per cent surge. U.S. markets managed to edge higher despite the threat of further military intervention in Iraq.
Shopping mall owners Westfield Group (WDC) and Westfield Retail Trust (WRT) are both in trading halts as investors narrowly approved a somewhat controversial US$70 billion restructure. Just over 76 per cent are said to have voted in favour of the split. A 75 per cent minimum approval was needed. WDC's Australian assets are expected to be combined with WRT's assets to create a new business called Scentre. This will allow WDC to focus on its better performing international assets.
The mining sector is underperforming as concerns in the world's seventh largest oil producer; Iraq is keeping investors a little nervous. BHP Billiton (BHP) and Rio Tinto (RIO) are both down by around 0.75 per cent; however both surged by well over 2 per cent on Thursday.
Gold producers are among the only improvers as concerns in the Middle East have made the safe haven asset more attractive to investors. Australia's largest gold miner Newcrest Mining (NCM) is up 4.3 per cent while smaller producers such as Oceanagold (OGC) and Regis Resources (RRL) are also surging. The price of gold is up 5.5 per cent so far this month.
The price of oil rose by 0.5 per cent last night to US$106 a barrel. Woodside Petroleum (WPL), the largest company in the energy sector is up 0.3 per cent. The oil and gas producer is still experiencing its worst week in a month however; after its biggest shareholder, Shell has been taking steps to significantly reduce its stake in WPL.
On the economic front, the Commonwealth Bank Business Sales Indicator (BSI) was released for May. Economy wide spending has slowed for the fifth straight month as warm weather and the Federal Budget has held back expenditure. The BSI is calculated by tracking the value of credit and debit card transactions processed by CBA merchant facilities.
The Australian dollar buys US94.1 cents, as comments by the U.S central bank that rates are likely to remain low for longer pushed the greenback south.
At lunch, 992.6 million shares have traded hands worth $1.72 billion. 435 stocks are higher, 418 are in the red and 362 are unchanged.
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