Big miners drag down share market

THE Australian share market was weaker at noon as losses in the resources sector continued to weigh, although banking stocks recovered.

At 12 noon AEST, the benchmark S&P/ASX200 index was down 26.5 points to 5114.4 while the broader All Ordinaries shed 30.6 points to 5230.5.

The September share price index futures contract was 20 points lower at 5118 on a volume of 20,255 contracts.

During the morning, the S&P/ASX200 index had reached a low of 5060.6, close to its 2008 trough of 5039.60 reached on March 17.

Macquarie Equities adviser Helen Spencer said banking stocks had recovered from their morning lows as investors took heart from increased confidence that the central bank was unlikely to raise interest rates again this year.

“While the market pulling is down a bit because of resources, the financials have had a great result,” Ms Spencer said.

“Talk about holding interest rates steady would also be comforting.”

National Australia Bank was up 60 cents, or 2.32 per cent, to $26.43, Westpac gained 26 cents, or 1.35 per cent, to $19.47, Commonwealth Bank added 90 cents, or 2.29 per cent, to $40.13 while ANZ increased 67 cents, or 3.77 per cent, to $18.44.

At 12.06pm AEST mining giant BHP Billiton fell $1.42, or 3.29 per cent, to $42.97, while its rival and takeover target Rio Tinto lost $4, or 2.91 per cent, to $133.50.

Making news today was latex company Ansell, which has paid $11.4 million to buy US military glove supplier Hawkeye Glove Company. Its shares were up 24 cents or 2.55 per cent to $9.64.

BlueScope Steel shares were steady at $11.12 after the company completed a successful debt raising in the US private placement market for $US325 million ($340.49 million).

Australia’s largest steel producer said the funds would be used to partially repay bridging finance for the acquisition of IMSA Steel Corp.

The spot price of gold in Sydney was $US939.55 per fine ounce at 1232 AEST, up $US14.35 from Monday’s close of $US925.20.

Gold stocks rose, with miner Lihir Gold adding three cent to $3.30, Newmont Mining up 19 cents at $5.58 and Newcrest Mining climbing 60 cents to $30.43.

The energy sector was mixed, as Santos gained 11 cents to $20.30, Oil Search lost two cents to $6.65 and Woodside Petroleum added 63 cents to $65.50.

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