RTTNews - The Australian market opened on a negative note on Friday with stock prices tumbling on overnight setback on Wall Street following weak employment data. Stocks across the board are reeling under pressure with investors pressing sales on renewed concerns about the state of the economy. Energy, materials, industrials and bank stocks are among the prominent losers in morning trade.
The Australian benchmark index S&P/ASX 200, which fell to 3,807 earlier this morning, is currently trading at 3,816, down 61.5 points from its previous close. The broader All Ordinaries index is down 60.5 points at 3,815.
The S&P/ASX200 Average had closed with a gain of 3.3 points at 3,877 on Thursday while the All Ordinaries index edged up 2.9 points to 2,875.
Shares of miner BHP Billiton are down sharply in the red. The stock is currently trading lower by as much as 3% on selling pressure. BHP Billiton has announced that it will sell its Yabulu nickel refinery in Queensland for an undisclosed sum and will book US$675 million (A$853.57 million) in writedowns on the sale. BHP Billiton will writedown the carrying value of Yabulu by an estimated US$500 million (A$632.27 million) and by a further US$175 million of unrecoverable tax benefits. The refinery is being sold to companies wholly owned by Professor Clive Palmer and is due to be finalized by the end of this month.
In another news, Rio Tinto has requested a trading halt on its shares as it seeks to subscribers for a shortfall in its Australian rights issue. Rio said it had attracted 94.76% take up of the new shares it offered as part of a 21 for 40 rights issue, totaling 142,149,887 shares. The Australian leg of the issue raised A$4.02 billion.
As part of their underwriting obligations, JP Morgan and Macquarie are seeking subscribers for the remaining 7,865,410 new shares offered through the Australian-listed Rio entity, by way of a bookbuild to be undertaken on Friday.
Sims Metal Management Limited, the world's largest listed metal and electronics recycling company, announced today the acquisition of the assets of Fairless Iron & Metal, LLC in Morrisville, Pennsylvania on the East Coast of the United States. Fairless, a full-service ferrous and non-ferrous recycler, operates two principal facilities including a state-of-the-art mega-shredder, non-ferrous recovery systems and a deep-water port export facility. Fairless processes approximately 60,000 tons of scrap metal per month sourced principally from New Jersey, New York, Eastern Pennsylvania and the inland United States via rail. The Sims Metal Management stock is currently trading lower by 2%.
Among other materials stocks Fortescue is trading with a loss of over 5%, Bluescope Steel is down by 3.2%, Lihir Gold is trading lower by around 2% and Newcrest Mining is down with a 2.2% loss.
Energy stocks Woodside Petroleum, Santos and Origin Energy are also trading in the red with notable losses.
In the banking space, ANZ Bank is down nearly a percent, Commonwealth Bank of Australia is trading lower by 1.4%, National Australia Bank is down 1.3% and Westpac Banking Corporation is down with a loss of 1.6%. Diversified financials stock Macquarie Group is down by over 3%.
In the currency market, the Australian dollar opened weak today and was trading at US$0.7936/41 early on. Currently, the Australian dollar is trading at 0.7937 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Japan is trading sharply lower with its benchmark Nikkei losing 1.65%. The New Zealand and Korean indices NZX 50 and KOSPI are trading lower by 0.4% and 0.7% respectively.
Wall Street ended with sharp losses on Thursday as disappointing employment data triggered a fairly heavy sell-off. The sharp decline in non-farm payroll employment in June pushed up unemployment rate to 9.5%, its highest level since August 1983.
The mood had turned so bearish following the release from the Labor department that a better-than-expected report card on the manufactured goods orders front failed to alter the fortunes of the market during the session.
The Dow closed down by 223.32 points or 2.6 percent at 8,281, the Nasdaq fell by 49.20 points or 2.7 percent to 1,796, and the S&P 500 closed down 26.91 points or 2.9 percent at 896.
Stock markets across the Asia-Pacific region had ended Thursday's session mostly lower. Japan's benchmark Nikkei 225 Index closed down by 0.6 percent, while Hong Kong's Hang Seng Index slipped by 1.1 percent.
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