Aussie stocks are in negative territory at midday, dragged down by the heavyweight miners as investors digest news that the government plans to slap a 40% tax on mining profits.
BHP Billiton and Rio Tinto have voiced concerns about the impact the new tax could have on their Australian operations, and there are also fears the tax could jeopardise investment in the resources sector, with speculation that US coal miner Peabody Energy may now reconsider its bid for Macarthur Coal.
All Ordinaries index had slipped 25 points, or 0.52 per cent, to 4,808 points.
In economic news: Manufacturing growth accelerated in April to the fastest pace in almost eight years. The Australian Industry Group/PricewaterhouseCoopers performance of manufacturing index jumped 9.3 points from March to a read of 59.8, the highest level since May 2002. A figure above 50 shows the industry is expanding.
And the TD Securities-Melbourne Institute inflation gauge rose by 2.9% in the year to April, marking the biggest gain in 14 months. The increase follows a 2.5% inflation rise in the year to March.
Qantas Airways Ltd (QAN) says passenger numbers across its airlines increased by 11.2% in March, compared to the previous corresponding period. For the financial year to March 31 passenger numbers were up 8.1% from the year before. Qantas carried 3,565 passengers during the month, compared with 3,207 in March 2009. Meanwhile, the company says it will update the market on the impact of the recent shutdown in international air space on its business shortly. Qantas Airways shares are steady at $2.84.
BT Investment Management Ltd (BTT) has increased its first-half profit by 58% thanks to the recovery in equity and credit markets. The fund manager reported a net profit of $9.7 million for the six months to March 31, up from $6.1 million for the same period a year before. Cash profit gained 11% to $14.2 million. It had $36.3 billion worth of funds under management as of March 31, 19% more than the year before. The company has declared a fully franked interim dividend of 5.5 cents per share. Shares in BT Investment Management rose 5.39% to $2.68.
Industrial explosives maker Orica Ltd (ORI) has reported a 75% drop in first half profit and announced a proposed demerger of its DuluxGroup business.The company booked a profit of $55.1 million for the six months to March 31, compared to the $220.4 million it posted for the same period a year before. Excluding material items, net profit after tax was $293 million, up 11% on 2009. Revenue for the half year fell 19% to $3.226 billion. For the 12 months to September 30, 2009, Orica reported a profit of $541.8 million.
The best performing sector at midday is the Health Care index, up 92 points at 8,505.
The worst performing sector is the Materials index, down 305 points to 11,988, investors wiping about $10 billion off the value of mining companies in early trade.
Gold is trading at US$1,177.40 an ounce and the Aussie dollar is trading at 92.48 US cents.
