Asian stock markets were falling Wednesday after a weak session on Wall Street, with analysts saying a correction was due after months of gains. Cyclical stocks were leading the declines in Tokyo and Sydney.
Some analysts are saying "Everyone has been calling for a pullback. Economic data are still okay and the longer-term view is bullish, but in the short term I think there has to be some profit-taking. There has been intense focus over the past few weeks on the historical fact that September can be painful to equities. Not usually so early though, "
The Australian share market remained in the red at noon following big losses in the energy sector after a drop in oil prices, and falls on Wall Street overnight.
All Ordinaries had fallen 94 points, or 2.08per cent, to 4418.
Some analysts are saying "Everyone seems to have talked themselves into the fact that there's going to be a pull-back in September and October, and it's sort of happening, basically."
Shares in Nexus Energy Ltd(NXS) fell after the company said it had avoided asset sales by raising about $31 million through an institutional placement. Now, Nexus says it will call on shareholders for an additional $43 million through a heavily discounted rights issue.
Australian real gross domestic product (GDP) rose by a seasonally adjusted 0.6 per cent in the June quarter, the Australian Bureau of Statistics said.This compared with an unrevised 0.4 per cent in the March quarter. Over the year to June, GDP rose 0.6 per cent.
National Australia Bank Ltd (NAB) says it will write-down the carrying value of its $309 million receivable due from the Australian tax office to nil. The bank says the receivable was in relation to its exchangeable capital units dispute with the ATO. NAB says that the adjustment will be reflected in its income statement but will not impact cash earnings. NAB shares fell 2.95 per cent to $28.33.
Babcock & Brown Infrastructure Group (BBI) has placed its shares in a trading halt today pending an announcement regarding a possible arrangement with a potential cornerstone investor to work towards a recapitalisation transaction. The debt laden company has been looking for possible investors to help offload assets to help repay its debt totalling close to $9.8 billion. Just last week the company posted a full year loss of close to $1 billion after incurring $895 million in write-downs on the group’s assets. Babcock & Brown Infrastructure Group shares are in a trading halt and last traded 7.8 cents.
Minerals miner Panoramic Resources Ltd (PAN) has posted a massive fall in net profit for the 2009 financial year and says it is looking at additional hedging commitments because of the risk of nickel prices falling.Net profit after tax and impairment for the year came to $5.6 million, down from $53.3 million in fiscal 2008. Net revenue for the year was$228.7 million down 4 per cent compared to last year.
The best performing sector at midday is the Consumer Staples index up 21 points to 7,277. Shares in Metcash up 2.31 per cent at $4.43. Shares in Foster’s Group and Lion Nathan are also stronger at noon.
The worst performing sector at midday is the Energy index, down 404 points at 15,853. Shares in Paladin Energy down 5.98 per cent to $4.56. Shares in Tap Oil and Karoon Gas Australia are also lower.
Gold is currently trading at $954.90 US an ounce and the Aussie dollar is trading at 83.06 US cents.
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