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Defying positive leads the Australian share market has dropped 0.5 per cent as blue chip miner BHP Billiton Limited (ASX:BHP) tumbles. The benchmark has slipped into the new week despite Wall Street gaining more than 1 per cent on Friday after an upbeat US jobs report.
Lower commodity prices are weighing on the mining sector and the gold sub sector has dropped 4.5 per cent after the price of the precious metal sank under $1,200 per ounce. BHP has fallen 2 per cent after outlining plans to cut costs at its iron ore operations in Western Australia. The Australian dollar is at four-year lows against the greenback, remaining under $US0.87 ahead of the Reserve Bank’s interest rate call tomorrow.
Figures
The S&P/ASX 200 index has dropped 28 points to 5,290. On the futures market the SPI is 38 points lower.
Company news
Telstra Corporation Limited (ASX:TLS) has completed its planned $1 billion off-market share buy-back. Australia’s largest telco bought back about 1.75 per cent of its issued shares at $4.60 per share which is a 14 per cent discount to the market price. CEO David Thodey noted very strong demand for the buy-back which resulted in an over-subscription and the need for a scale back to be applied. Mr Thodey says this has enabled Telstra to return surplus capital to shareholders in an efficient way and the company expects it will have a positive impact on earnings per share. Shares in Telstra Corporation have dipped 0.28 per cent to $5.38.
Dart Mining NL (ASX:DTM) has received a takeover offer from a mystery bidder valuing the company at more than double its current market capitalisation. The mining takeover target is focussed on exploration in Victoria and says it has scored an indicative and incomplete non-binding bid. The proposed bidder holds no mining assets and is offering 6.5 cents per share, valuing Dart at about $15.8 million compared to its current value of $7.5 million. While the suitor has invited further talks and Dart says it will engage further, Dart currently considers the valuation considerably below its own valuation of the company. Shares in Dart Mining last traded at $0.03.
Best and worst performers
Most sectors have moved into the red: The best performing sector is health care, gaining 0.4 per cent to 15,324. Shares in ResMed Inc. (ASX:RMD) have risen 3.29 per cent and trading at $5.82. Shares in Japara Healthcare Limited (ASX:JHC) and CSL Limited (ASX:CSL) are also stronger.
The worst performing sector is materials, retreating 1.6 per cent to 9,051. Shares in Northern Star Resources Limited (ASX:NST) have fallen 9.06 per cent, trading at $1.16. Shares in Beadell Resources Limited (ASX:BDR) and Medusa Mining Limited (ASX:MML) are also lower.
Gold and the dollar
Gold is buying $US1,186 an ounce.
The Australian dollar is buying $0.8675.
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