Following negative leads the Australian share market has dropped 1.4 per cent at noon, slumping to a three-week low. After ratings agency Standard and Poor’s cut the US credit outlook to negative, local investors have turned to safer assets while the banks and miners have fallen.
The S&P/ASX200 index has dropped 62 points and is 4,800 at noon. On the futures market the SPI is 59 points lower.
Company news: Leighton Holdings Ltd (ASX:LEI) has won a $586 million mining services contract as part of a joint venture for work at a diamond mine in Botswana. The contract is Leighton’s first mining project in Africa and includes mine scheduling, drill and blast, truck and shovel waste removal and limited ore mining. Separately, The Australian has revealed that Leighton’s sale of its 35 per cent stake in Leighton Contractors India has faced yet another hurdle. The company has reportedly again been forced to extend the $104 million cash payment deadline because of the Reserve Bank of India’s bureaucratic processes. Shares in Leighton Holdings have fallen 2.8 per cent at noon and are trading at $23.94.
Ongoing tensions between the Seven Group Holdings Ltd (ASX:SVW) and Ten Network Holdings Ltd (ASX:TEN) have reportedly resulted in Seven pulling out of its joint bidding with Ten for AFL broadcast rights for the next five years. Amid rising hostility over the court case surrounding former Seven executive James Warburton, the Herald Sun says Seven has lodged a solo $450 million bid and kept Ten in the dark about its intentions. The AFL has held contract discussions with Foxtel, Nine and a joint Seven-Ten bid and is believed to be targeting $1 billion for the total broadcast rights. The outcome is due to be announced by the end of the week. Shares in Seven Group have dropped 2.7 per cent at noon and are trading at $9.02.
Best and worst performers, and all are trading in the red: The sector with the smallest losses is Real Estate Investment Trusts, easing 4 points to 846. Shares in Commonwealth Property Office Fund have added 0.59 per cent and trading at $0.85. Shares in Australand Property Group and Charter Hall Office have also improved at midday. The worst performing sector is Materials dropping 277 points to 14,107. Shares in Alkane Resources have fallen 6.61 per cent and are trading $2.26. Shares in Lynas Corporation and Iluka Resources are also trading in the red at noon.
New Zealand: The NZSX50 has lost 19 points. Taking a look at the top four stocks by turnover, Westpac is at the top of the list with stock up 0.24 per cent at $33.00 followed by Telecom Corporation of New Zealand, Fletcher Building and ANZ
Gold and the dollar: Gold is trading at $US1,492 an ounce and the Aussie dollar is buying $US1.0474 cents.
