A poor start to the financial year — the market is down another 84 today after losing 44 yesterday. The SFE Futures were down 30 this morning.

Wall St. closed down 96 following a 268 point fall the day before. The Dow lost 100 points in the last hour of trade last night on late news that Moody’s may downgrade Spain’s AAA credit rating. The Dow was up 39 at best and down 116 at worst. The S&P 500 is well below its 200 day moving average and is on a PE of 14.9x. The NASDAQ fell for the 8th day on the trot. The oil price fell 31c to 7563c and Gold put on $3.50 to $1245.90. The Aussie dollar fell to 84.06c compared to 84.85c yesterday morning.

Asian markets struggling today on news that China’s manufacturing expanded at a slower pace for the 2nd straight month. The Purchasing Managers’ Index fell to 52.1 from 53.9 in May, less than the median 53.2 economists had expected.

  • No rate rise — In light of the G20 meeting highlighting the weak European growth outlook, on the back of concerns about Chinese growth, weak US jobs numbers and the continued fall in US bond yields (market interest rates) the RBA is thought very unlikely to raise interest rates at its meeting next Tuesday.
  • AGL Energy (AGK) has made a $123.2m (15c a share) takeover offer for Mosaic Oil (MOS). It is an incomplete and non-binding offer and represents a 92% premium to MOS’s last closing price of 7.8c. AGK up 14c to 1483c and MOS up 60.2% to 12.5c.
  • Liquefied Natural Gas (LNG) has announced the Heads of Agreement relating to the potential sale of their Gladstone LNG project to Arrow Energy (AOE) expired yesterday and that there was no value for LNG shareholders to pursue an extension. LNG up 1c to 32c and AOE down 4c to 481c.
  • Metcash (MTS) had agreed to buy the Franklins grocery chain in NSW for around $215m. The deal involves 85 supermarkets with South Africa’s Pick n Pay that they will onsell to independent IGA retailers. MTS up 17c to 436c.
  • Leighton Holdings (LEI) has been awarded a $US500m construction work project for the Chenani-Nashri tunnel in India. LEI down 3.5% to 2791c.
  • Bank of QLD (BOQ) has paid $475m for the acquisition for the local operations of CIT Group. BOQ down 20c to 1027c.
  • Australian Manufacturing activity slowed in June — the index fell by a seasonally adjusted 3.4 points to 52.9, although the index is still above 50 indicating expansion.
  • Building Approvals fell by a seasonally adjusted 6.6% in May from April. Retail Sales increased by a lower-than-expected 0.2% to a seasonally adjusted $20.16bn in May. Economists expected a 0.3% rise.
  • Stocks hitting fresh 52 week lows include: ASX Ltd (ASX), BlueScope Steel (BSL), Biota Holdings (BTA), Downer EDI (DOW), QBE Insurance (QBE) and Toll Holdings (TOL).

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