Tracking the overnight decline on Wall Street, the Australian stock market is trading weak on Friday with investors indulging in some heavy selling in stocks cutting across various sectors. Concerns about the pace of economic recovery appear to be weighing on sentiment.
Energy, financial, material and industrial stocks are among the prominent losers. The benchmark S&P/ASX 200 index, which declined to 4,480.6, is currently trading at 4,492, down 32.1 points or 0.7% from its previous close. The broader All Ordinaries index is down 30.2 points or 0.7% at 4,506.
On Thursday, the S&P/ASX 200 index ended down 5.8 points or 0.1% at 4,524.1, while the All Ordinaries index drifted down by 5.9 points or 0.1% to 4,536.2.
In the banking space, ANZ Bank, Commonwealth Bank of Australia, National Australia Bank and Westpac are down 1.2%-1.8%. Bank of Queensland is down with a loss of about 2% and Bendigo & Adelaide Bank is trading modestly lower.
Macquarie Group shares are down more than 4.5% after the company said earnings in the quarter to June 2010 were slightly ahead of the subdued quarter a year ago but weak markets were hitting the securities, investment banking and trading business that make up more than half its revenue.
Among mining stocks, BHP Billiton, Rio Tinto and Fortescue Metals are trading lower by 0.7%-1.2% and Newcrest Mining is down with a marginal loss.
Bluescope Steel and Lihir Gold are down marginally, while Orica and Incitec Pivot are up with modest gains.
Energy stocks Woodside Petroleum, Santos, Oil Search and Origin Energy are trading notably lower. Energy Resources of Australia is down 4.4% after the company revealed a first-half profit plunge due to production fall, higher maintenance costs and a stronger Australian dollar. The Rio Tinto Ltd majority-owned company said its first-half net profit after tax has fallen 82% to A$22.7 million from A$127.6 million in the prior corresponding half.
GrainCorp and AWB have said that the two companies will merge to create one of Australia's largest diversified agribusinesses. The two companies said that GrainCorp will issue to AWB shareholders one GrainCorp share for every 5.75 AWB shares they own, subject to an AWB shareholder vote.
The all-share transaction will result in a nil premium merger with the exchange ratio based on the volume weighted average prices of shares in each company over the last six months. The new combined entity is expected to be worth A$2 billion in market capitalization terms.
In the currency market, the Australian dollar opened higher and was quoting at US$0.9002-US$0.9004 in early trades, up 0.12% from Thursday's close of US$0.8991-US$0.8993. The Australian dollar is currently trading at 0.8981 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Japan, South Korea and Taiwan are down with notable losses. Singapore is down marginally while Shanghai and Malaysia are trading flat. The New Zealand market is up with modest gains. Markets across the region ended on a mixed note on Thursday.
On Wall Street, stocks ended moderately lower on Thursday, as mixed indications from the Federal Reserve, the labor market and the earnings front prompted some selling in the equity markets.
The Dow ended lower by 30.7 points or 0.3% at 10,467.2, the Nasdaq declined by 12.9 points or 0.6% to 2,251.7 and the S&P 500 slid by 4.6 points or 0.4% to 1,101.5.
Major European markets ended in the red on Thursday following a late-day sell off. The U.K.'s FTSE 100 index edged lower by 0.1%, while the French CAC index and the German DAX index lost 0.5% and 0.7% respectively.
Oil prices rebounded strongly from a weekly low and closed higher on Thursday. A weaker dollar and a decline in initial jobless claims contributed to the rise. Light, sweet crude for September delivery ended up US$1.37 at US$78.36 a barrel on the New York Mercantile Exchange, recording its first gain in five sessions.
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