Aussie sharemarket down, following falls in the US market: Afternoon market insights

The Australian market was down today, following the lead from the US overnight. The RBA cut its growth estimate for the Australian economy by half a percentage point to 3% for 2012, citing weak labour and housing markets. In its report, the RBA said the “sovereign debt problems in Europe” remain the biggest risk to global growth forecasts followed by the impact of “persistently high oil prices”.  Most Australian industry sectors lost ground. The telecommunication services, consumer staples and information technology services sector were the only ones that gained ground.

The S&P/ASX200 was down 0.86% to 4390.60. The All Ordinaries Index was also flat, at 0.90% down to 4453.70.

The upcoming US non-farm jobs report, the Greek and French elections are the key events for world financial markets to watch over the weekend.

“It is fair to say we will see a pretty subdued trade going into the (US jobs) report, however even when we do see the payrolls report, traders then need to position themselves for the weekend drama, with the Greek elections the major event risk,” Chris Weston of Institutional Dealing, IG Markets in Melbourne told LeadingCompany.

“Polls suggest the current coalition (Pasok and the New Democracy party) may have a tough time getting the required votes to keep the austerity regime going, so any uncertainty caused by a failure to achieve majority will certainly cause risk to be paired back on Monday.” Weston said. “It may be okay, but uncertainty breeds panic.”

“The French presidential election will not affect the markets much as a win by the socialist challenger (Francois Hollande) is expected, and has been priced in,” he said.

The day’s winners

Bathurst Resources (ASX: BTU) rose 4.44% to $3.175 at 3pm. Bathurst is an Australian and New Zealand listed company focused on becoming a producer of high quality coking and thermal coal to niche export markets. It is developing a high quality hard coking coal project in the Buller Coalfield in the South Island of New Zealand, a region known globally for its low ash and high fluidity coking coal. It announced this week the NZ environmental court had found in its favour regarding the relevance of climate change for its Escarpment mine. Bathurst’s shares are listed on the ASX and New Zealand Stock Exchanges (NZX:BTU).

Iluka Resources (ASX: ILU) was up 5.75% to $5.33 at 3.50pm. Iluka is involved in mineral sands exploration, project development, operations and marketing. It is the major producer of zircon globally and the largest producer of the high-grade titanium dioxide products of rutile and synthetic rutile, with operations in Australia and Virginia, US. Rutile is used in paints, plastics, paper, foods, and other applications that call for a bright white colour. Titanium dioxide pigment is the single greatest use of titanium worldwide. Nanoscale particles of rutile are transparent to visible light but are highly effective in the absorption of ultraviolet radiation, so they are used in sunscreens to protect against UV induced skin damage. Rutile is widely used as a welding electrode covering.

The day’s losers

Coalspur Mines (ASX: CPL) fell 7.87% to $1.405 by 2.30pm. Coalspur Mines is a coal exploration and development company with approximately 55,000 hectares of coal exploration leases in Alberta, Canada. The company announced this week it has filed the regulatory applications for Phase 1 of its key Vista Coal Project, including an environmental impact assessment, regulatory applications under the Coal Conservation Act, Alberta Environmental Enhancement Act, Water Act and Public Lands Act.

Decmil Group (ASX: DCG) was down 6.60% to $2.83 at 2.20pm. Decmil is a design, engineering and construction company serving blue-chip clients in the Australian oil and gas, resources and infrastructure sectors. Last month the Commonwealth Bank sold a big stake in the company.

Sector movers

The strongest sector was the S&P/ASX 200 Information Technology (Sector) index, which was up 1.07% to 540.2 at 3pm.

The weakest sector was the All Ordinaries gold (Sub-Industry) index, which was down 2.69% to 5537.40.

Currency

The Australian dollar was down today. One Australian dollar was buying $US1.0258 at 3pm AEST.

Asian markets

Asian stocks fell for a second day in a row as bond risk in the region rose and South Korea’s won slid as a report showed US service industries expanded less than projected overnight. The MSCI Asia Pacific Excluding Japan Index (MXAPJ) slipped 0.6% as of 11:52pm in Hong Kong. The South Korean won retreated against all of its 16 major counterparts.

The Markit iTraxx Asia index, which tracks the cost of insuring the region’s bonds against default, climbed to a one-week high.

Japan’s NIKKEI 225 was up 0.31%, or 29.30 points, to 9380.25 at 3pm AEST.

Hong Kong’s Hang Seng was down 0.76% or 161.89 points to 21087.60.

All eyes will be on European elections over the weekend. The euro is set for the biggest weekly decline in a month amid concern changes in leadership at elections in France and Greece this weekend will derail the region’s austerity efforts.

“Markets are concerned about what new leaders will do,” Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore told Bloomberg. Euro demand may see “a more negative impact because of some uncertainties ahead”.

The S&P/ASX200 was down 0.82% to 4392.50. The All Ordinaries Index was also flat, at 0.86% down to 4456.00.