The market is down 79. The SFE Futures were down 61 this morning.

The Dow Jones closed down 297 overnight. Dow was down 325 at worst. There were a couple of things that caused the Dow to collapse for a second consecutive session. Greece called an unexpected referendum on its latest bailout package with analysts saying if Greece votes against the bailout, it will result in a “hard default”. On top of that futures and CFD platform provider, MF Global Holdings, filed for bankruptcy due to losses on a Greek bond position and a realisation that they have been mixing company and lcinet money and lost hundreds of millions. Metals were down on the LME, the Oil price fell $1 to $92.19 and Gold dropped $13.40 to $1711.80. The Aussie dollar fell to 103.33c from 107.14c.

Main points:

  • The Reserve Bank of Australia cut the cash rate yesterday by 25bps to 4.5%, its lowest point since May last year. No major surprise considering 16 of 27 economists were expecting a rate cut.
  • Westpac (WBC) FY profit came in slightly below expectations at $6.34bn. Profit was up 10% in the year, boosted by a fall in impairment charges and strong performance from its retail and business banking divisions. They declared a final dividend of 80c, taking the full year dividend to 156, slightly above the 154c analysts expected. WBC down 3.3% to 2121c.
  • OneSteel (OST) has downgraded its 1st H earnings expectations due to the strong Australian dollar and falling iron ore prices. They now expect net profit for the first half of the year to be between $55m and $75m, excluding transaction costs relating to its acquisition of WPG Resources’ assets. November and December earnings expectations have been revised down after the iron ore dropped around 30% in the last three weeks. OST down 15% to 100.5c. Bluescope Steel (BSL) also down 6%.
  • Woolworths (WOW) has started a “wholesale review” of their supermarket marketing resources and strategy which they suggest could raise fresh food sales by up to $2.5 billion. They say a sale of the poor performing Dick Smith stores will be considered and that their liquor business must be improved.  WOW down 8c to 2359c.
  • The Australian Financial Review report that Anglo American is considering whether to withhold over $15 billion in coal mining investments and curtail 3,200 new jobs in Australia as they pressure the government to revise parts of the carbon tax.
  • The federal government has introduced legislation for its 30% minerals resource rent tax (MRRT) which will apply to the ‘extraordinary’ profits of coal and iron ore miners from July 1, 2012. Assistant Treasurer Bill Shorten proclaimed it as a proud day for Australians.
  • Building Approvals fell 13.6% to 11,889 units in September, seasonally adjusted. Economists were expecting a 5% fall.

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