Market falls as investors give budget thumbs down: Afternoon market insights

The Australian market finished down after investors look over the budget and the growing uncertainty coming out of Europe. Markets must wait for Greek party leaders to pare together a result from Sunday’s election before they can understand the risk implications.

The S&P/ASX200 was down 0.99% to 4271.10. The All Ordinaries Index was also down 1.07% to 4328.60.

“Europe remains the biggest issue facing markets that we need to have clarity on,” Andrew Pease, Sydney-based chief investment strategist for the Asia-Pacific region at Russell Investment Group, which manages about $150 billion, told Bloomberg.

“It’s not clear how deep the downturn is going to be and the effect this is going to have elsewhere.”

The day’s winners

Telecom Corp of New Zealand (ASX: TEL) was up 3.50% to $2.07 at 3pm. Telecom NZ’s share price has risen from $1.50 to over $2 since the start of the year. It has announced seven different share buy-back notices to the ASX in the last month, and appointed a new CEO in April.

Singapore Telecommunications (ASX: SGT) rose 2.02% to $2.52 at 2.30pm. Singtel, the Singapore Government owned multinational (owner of Optus in Australia) announced to the ASX it now has 445 million mobile phone customers. It says its Optus division in Australia has added 82,000 post-paid mobile customers this quarter, and has extended its market leadership in Singapore, adding 273,000 customers in the last 12 months. Its Airtil mobile business in south Asia and Africa had reached 241 million customers as of March 31 this year.

The day’s losers

Mirabela Nickel (ASX: MBN) has fallen 30.23% to $0.30. Mirabela Nickel is a nickel producer, operating one of the world’s largest open pit nickel sulphide mines in Brazil. It is listed on the ASX and the Toronto Stock Exchange (MNB). It was placed in a trading halt today pending an announcement on Friday. NAB sold millions of shares in the miner two days ago. Since November its shares have fallen from $1.60 to the latest price of Intrepid Mines (ASX: IAU) was down 9.27% to $0.685 at 3pm. Intrepid Mines is a Canadian and Australian listed gold and silver mining and exploration company. The company has producing mines in Australia and Argentina. Intrepid has exploration properties are located in Argentina, El Salvador, Australia and Canada and has been falling for the last few days.

Sector movers

The strongest sector was the S&P/ASX 200 telecommunication services (Sector) which was up 1.11% to 1256.30 at 3.40pm.

The weakest sector was the All Ordinaries Gold (Sub-Industry) index which was down 4.84% to 5087.60.

Currency

One Australian dollar was buying $US1.006 at 2.40pm, the lowest level in four months after Greece’s Syriza Radical-left party leader, Alexis Tsipras, said he rejected Greece’s bailout deal. RBC currency strategist Michael Turner said the dollar fell lower after Prime Minister Julia Gillard said she would provide a tax cut to Australian businesses, even though this did not appear in the budget plan.

“It’s just a dip below 101 (US cents) on the back of Gillard’s comments, but it’s been under pressure since yesterday,” Turner said.

“Elections in Europe have been the main driver of the currency throughout the course of this week.”

Asia

Asian financial markets fell to the lowest level in more than three months on concern Greek leaders will back out of bailout agreements. The MSCI Asia Pacific Index (MXAP) declined 1.4% at 1:04 p.m. in Tokyo. The cost of insuring Japanese bonds from default increased, according to traders of credit-default swaps.

Japan’s NIKKEI 225 was down 1.38%, or 126.53 points, to 9055.12 at 3.40pm AEST.

Hong Kong’s Hang Seng was down 0.76% or 155.55 points to 20329.20.

“Political turmoil in Greece raised concerns that the nation may not implement austerity measures and worsen Europe’s debt crisis,” Ken Kajisa, an analyst at broker ACE Koeki in Tokyo told Bloomberg.

“Risk aversion by investors increased, leading to sales of industrial commodities including rubber.”

The S&P/ASX200 was down 0.99% to 4271.60. The All Ordinaries Index was also down 1.08% to 4328.80.

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