The Australian sharemarket has dropped lower today on negative leads from the US and fears that the swine flu pandemic will continue to worsen.
Wall Street has fallen due to lower confidence in banks and swine flu concerns. The Dow Jones Industrial Average has fallen 8.05 points or 0.10% to 8016.95.
The benchmark S&P/ASX200 index was down 15.4 points or 0.42% to 3693 at 12.25 AEST. The dollar has also opened slightly higher at US70 cents.
Commonwealth Bank shares have dropped 0.6% to $35.27, while BHP Billiton shares have fallen 0.6% to $31.89. AMP shares declined 0.8% to $5.05 as Westpac lost 3% to $19.10.
ANZ shares have fallen 4.9% to $15.81 after the bank announced a 43% drop in first half net profit to just $954 million from $1.6 billion a year ago. The bank has also cut its interim dividend by 26%.
But chief executive Mike Smith has said that Australia’s recession will not be as deep as other countries will experience.
“The expected slowdown in Australia and New Zealand is now playing out with the outlook for provisions in the second half likely to be somewhat more difficult than the first half,” Smith said.
“And we expect that situation to continue through to early 2010.”
In other bank news, Commonwealth Bank has said that it is facing up to $27 million in losses from the collapse of appliance company Kleenmaid.
Customers who have used a credit card to make deposits for products that cannot be delivered can claim the funds back from the bank, while a spokesperson has said the bank is still examining its liability.
Australia’s third largest iron ore producer, Fortescue Metals, has slashed its sales forecast by 15% and says it will not catch up on lost production in the full year.
Fortescue blames negative operating conditions in the March quarter.
“The adverse operating conditions over the March quarter will impact on the full year results as Fortescue will not be able to catch up lost production,” the company said in a statement to the ASX.
Meanwhile, sales of new homes in Australia have jumped for a third consecutive month, according to the Housing Industry Association.
New data from the HIA shows that sales of new homes rose a seasonally adjusted 4.2% in March. Sales of private detached homes jumped by 4.1% to be up 17% in the first quarter, while apartment sales jumped by 4.7% but were still down 14% for the quarter.
“It is clear that in the first quarter of 2009 the project home building market was buoyed by the first home owner boost for new dwellings, together with very low variable mortgage rates,” HIA chief economist Harley Dale said in a statement.