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The local share market is deep in the red at midday, weighed down by declines in mining stocks and banks who have been battered by news of a potential euro zone debt crisis building.
Wall St took a big hit last night on news that Standard and Poors had downgraded Greece’s debt rating to Junk over uncertainty surrounding the country’s ability to rise above its current fiscal crisis, also lowering Portugal’s rating.
However RBA assistant governor Guy Debelle says so far Australia has been shielded from the financial crisis occurring in Greece.
Mr Debelle warned however that while the crisis had not affected those outside Europe, if market conditions deteriorate it may spread.
The S&P/ASX200 index is 76 points lower at 4,804, and on the futures market, the SPI200’s down 76.
In economic news: Data released by the ABS today show that Australia’s consumer price index rose 0.9% in the first quarter.
In company news: Gaming machine provider Aristocrat Leisure Ltd (ASX:ALL) says sustained growth in the Aussie dollar could potentially have a significant impact on the company’s 2010 net profit. CEO Jamie Odell told shareholders at the company’s annual general meeting today, that a one cent movement in the Australian dollar impacts the company’s bottom line by about $1.3 million. Mr Odell says Aristocrat expects the translational impact of foreign exchange will be seen predominantly in the first half, and therefore the company anticipates that overall performance for 2010 will be weighted towards the second half of the year. Aristocrat Leisure shares fell 3.16% to $4.29
Zinc, lead and silver miner CBH Resources Ltd (ASX:CBH) has recommended shareholders vote in favour of a takeover bid by major shareholder Japan’s Toho Zinc. Toho’s revised offer of 24 cents a share to acquire all the remaining shares it does not already own, values the company at $262.7 million. Managing director Stephen Dennis, says the offer is very attractive for CBH shareholders, and is above the independent expert’s valuation range of $0.187 cents to $0.232 cents a share. Shares in CBH Resources are steady at $0.23
Turning now to market indices: The best performing sector at midday is the Health Care index, up 55 points to 8,489. Shares in Blackmores rose 2.28% to $23.79. Shares in CSL and Fisher & Paykel Healthcare are also higher at noon.
The worst performing sector is the Materials index, down 277 points to 12,428. Shares in Murchison Metals dropped 8.86% to $2.47, while shares in Berkeley Resources and Mirabela Nickel are also lower.
Looking to New Zealand and the NZSX50 is 24 point lower. Taking a look at the top 4 stocks by turnover: Topping the list is Telecom of New Zealand, stock down 0.46% at $2.18. Following the Telco is Goodman Fielder, Westpac and ANZ.
To gold and the dollar: Gold is trading at US$1,165.90 an ounce and the Aussie dollar is trading at 91.88 US cents.