The market is down 5. The SFE Futures were down 9 this morning.

The Dow Jones closed down 100 overnight. Dow down 131 at worst and up 59 at best. A three and a half hour conference call of European Finance Ministers failed to raise the 200bn euro IMF injection expected and instead raised 150bn. The ECB President, Mario Draghi, said the economic outlook contained substantial downside risks, with a recovery in economic activity to be slow. He predicts that 2012 will be a difficult year for banks. The ECB released a new Financial Stability Review showing the risk of failure of two or more major euro zone banks has risen sharply over the past six months and is now at its highest since 2007. Financial stocks were worst, down 2.3%. Bank of America fell 4% to its lowest level in more than two years. Metals down on the LME, the oil price put on 56c from 9409c, Gold fell $2.50 to $1595.40. The Aussie dollar fell to 98.95c from 99.90c.

Main points:

  • Newcrest Mining (NCM) has cut their full year gold production guidance by about 6% due to a production shutdown at their mine on Lihir Island in PNG and with lower grades than expected at their Telfer Mine in WA.  NCM down another 3% to 3015c.
  • Macmahon Holdings (MAH) has upgraded its full year profit forecast. They now expect profit for the year to June 30, to be more than $55 million because of additional work, up from an earlier forecast of $45 million. Patersons have upped the stock to Buy from Hold driven by expectations of winning additional work. MAH up 4.5% to 57c.
  • Billabong (BBG) fell 44% yesterday – It is now below its IPO price. It was down another 12% this morning first thing. The shorters are in and the clear concern is that they are going to run out or money without a capital injection and if it’s an equity issue it will be highly dilutive. BBG down 15% to 173.5c.
  • Front page of the AFR reported that China’s Yanzhou Coal Mining has proposed a merger with Gloucester Coal (GCL). GCL is in a trading halt and expects to make an announcement “in connection with a possible change of control transaction, but is not yet in a position to make the announcement”. GCL last traded at 703c.
  • Telstra (TLS) has formally extended the deadline for their $11bn deal with NBN Co. The definitive agreement was supposed to expire today. Talk is that the new agreement will be pushed well past February. TLS up 2c to 325c.
  • North Korean leader Kim Jong-Il’s death has added global uncertainty rather than relieved it.
  • Elders (ELD) says profits in the first 2 months of the year are on track with their improvement plans. They expect to announce a better result than the $395.3m loss last year. ELD up 2c to 25c.
  • Caltex Australia (CTX) said their realised refiner margin for the month of November fell to $US5.59 a barrel from US$6.64, as margins were squeezed. CTX down 2% to 1179c.
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