The first rally in local shares in six days faded by lunchtime as investors juggled portfolios ahead of the end of the financial year and waited for a breakthrough on the proposed resources tax.
At 1pm the ASX 200 was unchanged at 4385 and well off the morning high of 4410 as the industrial sector skidded to a new 2010 low. Modest gains for most of the big banks and miners helped off-set losses among gold miners, energy companies and industrials.
Treasurer Wayne Swan and Resources Minister Martin Ferguson are set to meet mining executives tomorrow in an attempt to break an impasse over the government's proposed resources tax, The Australian reported this morning. The meeting comes as the mining industry turned up the heat on the government to deliver on the new Prime Minister's pledge to work towards a compromise.
"I have really serious doubts about the government's commitment to finding a workable solution. They have had four days to get something to us," the Association of Mining and Exploration Companies chief executive, Simon Bennison, told The Age newspaper.
The Australian also reported that the government is set to announce a deal for the coal-seam gas industry that will effectively place it under the existing Petroleum Resources Rent Tax, rather than the proposed super profits tax. Read more here.
Asian markets were mixed. Japan's Nikkei rallied 0.58% despite a surprise rise in unemployment, but Shanghai slipped 0.8% and Hong Kong's Hang Seng was off 0.9%. Dow futures were recently at -11.
Crude oil futures were unchanged this morning at $78.10 a barrel. The spot gold price was 30 cents weaker at $1,238.40 an ounce.
First hint of an end-of-year pump? It ain't much but let's hope so. A pretty modest morning's work here, trading small bounces in DOW, PRY and GBG but nothing substantial. Small speculator taken in ARM in case this level holds.
