Business confidence declines in June: Midday roundup

Business confidence has continued to fall in June, according to the latest NAB monthly business survey, with the retail industry still suffering.

The survey shows confidence has fallen by six points to zero, with business still trying to recover from the natural disaster that occurred in January. In particular, the retail industry is struggling to remain afloat.

“Despite conditions improving a little in the month, the overall picture remains quite subdued, likely reflecting the negative impact the high Australian dollar on a number of trade-based industries, continued cautiousness of households and concerns about global growth,” NAB said.

“Conditions in retail fell to worryingly low levels (to around that of Nov 2008, just prior to the Government’s initial cash handouts), while manufacturing, construction and wholesale were again poor

The drop in confidence has come although business conditions have improved by two points.

“While conditions were weaker in mining, the outlook remains strong as reflected in high confidence levels.”

NAB does not expect another interest rate rise until December.

Shares continue to fall after carbon tax

The Australian share market has opened lower for a second consecutive day, falling over 1% this morning as investors continue to sell after a number of companies have flagged multi-million dollar hits due to the carbon tax.

The benchmark S&P/ASX200 index was down 1.52% or 69 points to 4512.8 at 12.10 AEST, while the Australian dollar was down to $US1.06c.

ANZ shares lost 1.48% to $21.24, while Commonwealth Bank shares fell 1.4% to $49.84. Westpac lost 1.34% to $21.30 as AMP fell 1.24% to $4.78.

In the United States, the Dow Jones Industrial Average fell 151.44 points or 1.2% to 12,505.76 on fears that budget talks have begun to fail.

News shares still suffering

News Corporation shares have continued to fall this morning after the fallout from the phone hacking scandal continues to wreak havoc on Rupert Murdoch’s empire.

Shares have fallen a further 4.4% this morning alone after dropping nearly 4% yesterday. Macquarie analyst Alex Pollak has reportedly cut the company’s forecast by 18% “on the basis of high level regulatory uncertainty in the UK and US”, Fairfax has reported.

“The possibility of class actions by the estimated 4000 victims of phone hacking, along with News of the World journalists not involved in hacking, is real,” Pollak said.

Transurban revenue continues to rise

Toll road owner Transurban has recorded a 13.9% increase in revenue in the June quarter, the company has announced.

The firm said that the Sydney Lane Cove Tunnel and the Citylink system in Melbourne have provided boosts to revenue, which was up to $224.8 million.

“The June quarter result brings to a close an excellent year for Transurban,” chief executive Officer Chris Lynch said. “This result was led by CityLink, which delivered annual traffic growth of almost nine per cent on the back of the Southern Link Upgrade.”

Obama vows to cut debt

United States president Barack Obama and Republican legislators have failed to agree on a deal that will see the country avoid a debt default in August, although more pressure is growing for tax increases.

Another day of discussions has been scheduled, with Obama saying that both sides need to make sacrifices.

“If not now, when?” Obama said.