BusinessNow: Live coverage of financial markets and companies, plus analysis and opinion

Wesfarmers and major banks are pulling the local market to its third loss in a row.

The Australian market hasn’t drifted lower for three days in a row for 10 weeks.

• Lowe’s, Woolies in court over Masters
• Stocks slide
• Estia plunges on results
• Earnings season letdown
• McAleese enters administration

Welcome to the BusinessNow blog for Monday, August 29. Earnings season is drawing to a close, but there are results in from Cardno, Estia Health and Beach Energy, while transport group McAleese has collapsed into administration.

8.41pm:How much super is enough?

The government has proclaimed that $1.6 million is enough to provide sufficient income in retirement, writes Tony Negline.

Is it right? This is a good question but before we can answer it, we need to consider some numbers.

One of the good policies in the 2006 Better Super regime introduced by the Howard/Costello government was the removal of Reasonable Benefit Limits or RBLs. Back then we had two RBLs — a lump sum and pension RBLs.

Each July 1 these RBLs were indexed by movements in average weekly earnings. The 2006-07 lump sum RBL was about $680,000 and the pension RBL was $1.35m. If these had been indexed to the 2015-16 financial year then they would have had been worth about $930,000 and $1.87m. Read more.

7.56pm:The blockchain revolution

A change is coming to financial services that its proponents compare to the introduction of the internet: its effects will be dramatic, but it’s hard to see all its potential yet, writesElizabeth Redman.

A report by the World Economic Forum this month shows the depth of interest from the financial services community. At least 24 countries are currently investing in distributed ledger technology, with venture capital investments passing $US1.4 billion ($1.85bn) in the past three years. Some 80 per cent of banks are tipped to initiate distributed ledger projects by 2017.

The US is host to several start-ups in this space, but interest is global. “It’s likely you’ll see a quicker path to adoption in smaller economies,” says Canada-based Matthew Spoke, founder and chief executive at blockchain start-up Nuco. He compares this to communication technology: “A large part of the African continent skipped over the need for landline telephones and went straight to mobile.” Read more.

7.11pm:Aussie gold production hits 15-year high

Australia’s gold production has surged to a 15-year high in response to bumper gold prices prompting producers to maximise output to capture $700-plus an ounce margins, writes Barry Fitzgerald.

A production survey by industry consultant Surbiton Associates found gold output in the June year totalled 292 tonnes (9.38 million ounces), worth $16.2 billion at spot prices.

That was 2 per cent more than in the previous financial year, with production in the final June quarter at 74 tonnes.

Surbiton director Sandra Close called on the industry to turn more of its bumper returns to exploration. Read more.

6.52: Vocus founder plots next move

Vocus Communications founder James Spenceley has launched his next venture, teaming up with fund manager Gary Rollo to launch MHOR Asset Management, a fund for smaller companies listed or who are soon to list,writes David Swan.

Mr Spenceley, who founded Vocus 10 years ago before it merged with Melbourne telco M2 earlier this year, said small cap companies were often overlooked by investors due to the work required.

“The market is inefficient for them as very few brokers cover stocks in early stages, and this creates huge opportunities,” Mr Spenceley said. Read more.

6.19pm:Fitch lifts Fortescue outlook

Ratings agency Fitch has joined Moody’s in upgrading the credit rating of Fortescue Metals Group, hailing the iron ore miner’s “strong cost reduction progress” and moves to further reduce secured debt.

Fitch lifted the rating on Fortescue’s long-term senior unsecured debt to BB+ , from BB, and its outlook from negative to stable, in the wake of its full-year profit result last week.

It follows Moody’s move last week to similarly upgrade the miner’s short-term debt rating.

Fitch is forecasting direct cash costs at the upper end of Fortescue guidance for fiscal 2017, despite flagging that further cost improvements may be challenging.

“This is because we recognise that factors beyond Fortescue’s control, such as crude oil prices and the Australian dollar exchange rate, which have a significant effect on its cost structure,” Fitch said.

5.50pm:European stocks open lower

The eurozone’s main stock markets traded lower in early business Monday as analysts pondered the implications of a key speech by Federal Reserve chief Janet Yellen on interest rates.

“Markets are finding it difficult to interpret remarks by Janet Yellen and other Fed members on the future of interest rates,” economists at Saxo Banque said in a note.

By 7.45am GMT (5.45pm AEST), Frankfurt’s DAX 30 was down 0.6 per cent at 10,523.51, while the Paris CAC 40 showed a loss of 0.8 percent at 4,407.84.

The London FTSE, Europe’s biggest stockmarket, was shut on Monday for a bank holiday. AFP

5.35pm: Dollar downbeat in late trade

The Australian dollar might be as much as 5 per cent overvalued at current levels, enough to put the brakes on recovery across the resource-rich economy, according to research by UBS.

The Aussie dollar was lower in late trade on Monday, hit hard over the weekend by hawkish comments from senior US Federal Reserve officials that supported the US dollar.

At 5.30pm (AEST), the unit was trading at US75.41 cents, down from US75.63c on Friday. Read more. Dow Jones.

5.14pm:Historic media reform strides forward

The Turnbull government’s historic media reform package has been approved by the party room and a newly formed backbench committee, as the industry’s leading executives prepare to descend on the nation’s capital, writes Jake Mitchell.

The Coalition put the bill to the communications backbench committee and party room today, as revealed by The Australian, and it will be reintroduced when the new parliament sits tomorrow or on Wednesday. Read more.

4.47pm:Nail guns at 10 paces

It’s obvious that what Lowe’s wants is a far cry from what Woolworths thinks it should get, writes Stephen Bartholomeusz.

In February, when providing an update on its planned exit from the Masters home improvement business, Woolworths the option that its joint venture partner, Lowe’s of the US, held to “put” its 33 per cent interest to Woolworths at “$nil.” It’s been obvious for some time that Lowe’s had a different view of that option’s value.

While the joint venture agreement between the two shareholders, in the Hydrox Holdings joint venture that contained the home improvement, had a process for establishing the value of the option (if they could agree a value they each appointed an independent expert and, if there were still no agreement, a third to come up a price within the initial experts’ range) the months ticked by and there was no deal. Read more.

4.20pm:Stocks drop for third day in a row

The Australian sharemarket has stumbled to a third loss in as many trading days as banks were sold off with vigour and the major supermarket chains lost ground, writes Daniel Palmer.

At the closing bell, the benchmark S&P/ASX 200 index slumped 46.3 points, or 0.84 per cent, to 5,469.2, while the broader All Ordinaries index dipped 45.9 points, or 0.82 per cent, to 5,561.5.

Blue chips were in the line of fire after a strong run-up recently, with retailer Woolworths slipping 0.76 per cent to $24.71 after doubt was cast over its Masters deal.

Elsewhere, chief rival Wesfarmers weakened 3.3 per cent to $42.86 as it traded ex-dividend.

3.17pm:Investors have nowhere to run

The ASX 200 index has fallen 1.9 per cent so far this month, which is fair representation of what corporate Australia dished up in terms of full-year profits, writes John Durie.

The prevailing theme was slow revenue growth, and by now the ‘costs out’ program is also starting to slow, so profits fell 8.6 per cent.

The good news is at least margins are starting to edge a little higher, which shows business is running well, it’s just got no fire power.
Read more

2.23pm:Wesfarmers, banks pull ASX lower

Australian stocks are steaming towards their first three-day fall in 10 weeks as banks and Wesfarmers see the ASX sink to a fresh intraday low this afternoon.

Australian stocks haven’t seen three-straight down days since June 15

At 2pm AEST the S&P/ASX 200 was 1.1 per cent lower for the day at 5457.6 points – thanks in part to Wesfarmers and Woodside trading ex-dividend and major banks struggling.

The dividend date has taken 3.4 per cent off Wesfarmers, while Woodside has given up 3.2 per cent.

Westpac is the worst performing of the big banks, down 1.2 per cent, while CBA slips 0.8 per cent, NAB gives up 1.15 per cent and ANZ stumbles 0.7 per cent.

Telstra is standing out among the blue chips as it rises 0.2 per cent, while CSL falls 0.5 per cent and Woolworths loses 0.6 per cent.

Austal is today’s best performer with a 9.4 per cent gain, while Mesoblast picks up 8.2 per cent.

Coca-Cola Amatil is back in favour after the market gave the company a kicking despite what analysts saw to be a good result on Thursday.

On the negative side of the ledger, gold miners are having a rough session, while concerns over the future of Australian powdered milk imports to China have hit Bellamy’s and A2 Milk hard, with both slumping more than 4 per cent today.

1.50pm:‘Let’s abolish paper money!’

with interest rates at, below or near zero everywhere, how do we deal with another downturn?

As Alan Kohler writes today, one solution is for fiscal policy to step up and for central banks to sit the next one out, shackled as they are by the “zero lower bound”.

But that idea is anathema to a self-respecting central banker at any time, let alone after three or four decades of being the centre of the economic universe, sagely pulling the levers that determine the fate of humankind.

Carnegie Mellon University Professor Marvin Goodfriend was actually the first economist, in 1999, to suggest that zero is not a lower bound, and that negative interest rates were an option, way ahead of his time.

In his Jackson Hole paper on Friday he went a step further: “The most straightforward way to unencumber interest rate policy completely at the zero bound is to abolish paper currency.”
Read more

1.25pm:Australia Inc in the doldrums

As earnings season winds down, Stephen Bartholomeusz has crunched the numbers to assess just how our leading companies are faring. And it makes for disturbing reading.

“While there are still a handful of companies yet to report this earnings season, the scoresheet as of the end of last week shows Australia Inc is struggling to generate growth and that the momentum that it had been generating from cost cutting and historically low interest rates has faded.

“It isn’t just that the companies have underperformed market expectations, which in aggregate they have, but the overall results are unimpressive, at best, even when compared with the prior year’s actual outcomes.”
Read more

12.59pm:Lowe’s takes court action against Woolies

US hardware giant Lowe’s has taken urgent action in the Federal Court this morning against its partner in failed hardware business Masters, Woolworths, which could scupper the supermarket company’s deal last week to pull the plug on the doomed Masters business and sell it off to a range of investors and vulture funds for $1.5 billion.

Appearing in the court this morning, Lowe’s sought an order winding up the Masters business, housed in a corporate vehicle called Hydrox Holdings, on the grounds of shareholder oppression by Woolworths in the sale of the Masters business.
Eli Greenblat, Ben Butler
Read more

12.55pm:Stocks retreat after weak earning season

Australia’s S&P/ASX 200 is down 1.1 per cent at 5455 after earlier hitting a six-week low of 5452.3.

The energy sector leads broadbased falls amid a 1.2 per cent fall in WTI crude oil futures.

The index is on track for its biggest one-day fall in almost four weeks after a disappointing earnings season that saw about twice as many downgrades as there were upgrades by analysts. Friday’s comments from US Fed officials pointing to a September rate hike are also weighing on market sentiment, though the Australian share market is currently the weakest in the region.

So far this month the index is down 1.9 per cent, near the five-year average of a 1.8 per cent decline.

12.40pm:Fed puts dollar under pressure

The Australian dollar’s recent downtrend looks set to continue this week amid speculation of US interest rate hikes following the Jackson Hole central bankers’ meeting, writes David Rogers.

Fed chair Janet Yellen has world currencies in the palm of her hand.

The local currency struck a fresh four-week low of US75.25c in early Sydney trading after peaking at US76.92c on Friday night. At 10.42am (AEST) the dollar was trading at US75.34c.

After hitting a three-month high of US77.56c in early August as low interest rates globally fuelled demand for Australian bonds and equities, the Aussie dollar has fallen as much as 3 per cent as comments from Federal Reserve officials and US economic data indicate the world’s most powerful central bank could lift interest rates as soon as next month.
Read more

12.10pm:Why McAleese’s rescue plan failed

Transport group McAleese was put into administration after a company associated with one of its directors, Gilberto Maggiolo, refused to grant rental reductions that were required as part of rescue plan for the company.

Mr Maggiolo, a Queensland construction identity, is a director of McAleese and of TTPH Pty Ltd, which was asked to help secure a reduction in the real property rental costs for McAleese as part of a deal backed by distressed debt investor SC Lowy.

Mr Maggiolo and his longtime business partner Tony Bosso had opposed the recapitalisation plan and were attempting to build support for an alternative, as yet undisclosed, proposal for McAleese through their company Havenfresh.

They had also proposed a resolution to remove five of McAleese’s six directors, including former rich lister Mark Rowsthorn. Mr Maggiolo would have been the sole director left had the vote proceeded.

Andrew White, Bridget Carter
Read more

11.43am:New home sales slump

New home sales slumped in July, offsetting a sharp gain in June and strengthening calls the cycle may have peaked, writes Daniel Palmer.

“The short term outlook remains intact, but the situation could look very different from next year.”

The latest Housing Industry Association new home sales report showed a lacklustre market to begin the new financial year as sales weakened 9.7 per cent, with the industry body warning the numbers pointed to a downturn.

“The short term outlook for healthy levels of new home construction remains intact – calendar year 2016 will be a record year for new dwelling commencements, but the situation could look very different from next year,” HIA chief economist Harley Dale said.
Read more

11.25am:McAleese shares surged before collapse

The appointment of McGrath Nicol as administrator for collapsed transport group McAleese comes on the back of strange market action at the distressed company last week, writes Daniel Palmer.

Its share price spiked 66.7 per cent across Wednesday and Thursday, driving its market value back to $7.1m prior to today’s suspension. That’s up from $4.2m on Tuesday, but well shy of its valuation following a high-profile $166m float in 2013.

The sudden uplift in interest in the near worthless shares preceded a planned August 29 vote on the proposed removal of five of the group’s six board members and a September 19 vote to ratify the SC Lowy.

The shareholder meetings will not proceed in the wake of today’s update.
Read Daniel Palmer’s full report on McAleese’s collapse

11.03am:Stocks slide at open

The Australian sharemarket is on track for a third red session in as many days as commodity prices retreated after hawkish rhetoric from the Fed pushed the US dollar higher.

At the opening bell, the benchmark S&P/ASX 200 index slid 21.2 points, or 0.38 per cent, to 5,494.3, while the broader All Ordinaries index gave back 19.6 points, or 0.35 per cent, to 5,587.3.
Read more

10.55am:Estia plunges on results

Estia Health shares have plunged after the group’s full-year numbers and FY17 guidance fell short of expectations, writes Daniel Palmer.

The aged care provider said its underlying profit rose 16 per cent to $51.8m for the year to June 30 on the back of a 50 per cent surge in revenue to $446.5m.

The news led traders to shun the group’s shares in early deals, with the group trading down 12 per cent at $4.33 at 10.35am (AEST).

At one stage Estia plummeted as much as 18 per cent to a record low, with the intraday drop its worst since listing in December 2014.
Read more

10.45am:Beach Energy extends loss

Beach Energy has reported a second straight full-year loss of over half a billion dollars as weak oil prices weigh on the energy sector, writes Daniel Palmer.

For the year to June 30, Beach (BPT) reported a net loss of $588.8m, 15 per cent blow out from last year’s corresponding $514.1m loss.
Read more

10.30am:Nine on the way down: Morgan Stanley

Nine Entertainment’s share of the TV ad market will be worth less in two years than the $1.1 billion currently estimated as the expiration of the company’s cricket contract represents a huge risk event, according to Morgan Stanley.

Cricket costs could knock Nine out of the park, according to analysts

Analysts say Nine’s fiscal 2019 earnings will come in 30 per cent below current consensus thanks to two key factors:

1. Revenue share will be lower

2. The market is not factoring in higher cricket TV rights costs

Cricket costs will hit them for six

“Nine’s Australian cricket contract expires at the end of the 2017/2018 season, and we think renewal represents risk to Nine’s EBITDA of A$30-50m p.a, as of fiscal 2019E,” analysts led by Andrew McLeod said.

“Why? Last year, the NRL and AFL TV rights deals rolled over at 59-67 per cent total increases in price. We have 20-plus years of data that points to a CAGR of 12-15% across all major TV sports rights in Australia, so it seems prudent to factor in the same for NEC’s next cricket deal.”

Morgan Stanley predicts a 22 per cent share price decline over the next two years.

Nine shares have dropped just under 50 per cent in the year to date, but gained 1.2 per cent at the open this morning to $1.01.

Analysts are split on Nine, according to Bloomberg, with four buy ratings, two holds and three sells.

10.16am:Cardno posts FY loss, CEO departs

Infrastructure consultancy Cardno has reported the resignation of its chief executive as the group delivered more red ink to shareholders, writes Daniel Palmer.

For the 12 months to June 30, Cardno (CDD) recorded a loss of $176m, a modest improvement from last year’s $245.1m loss.

The result was driven by a post-tax impairment charge of $154.3m.

The news coincided with the departure of the group’s boss Richard Wankmuller, with the company saying he was no longer committed to the demands of the job.
Read more

10.00am:Earnings season letdown

Plenty of big names have been leaning back this earnings season, nodding their heads… “This all seems to be in order,” you might hear them say, a little hoarse.

But has the news really been “fairly good”, as Deutsche Bank proclaimed on Friday? Not according to Credit Suisse.

Credit Suisse has revealed this earnings season it has downgraded 26 of its stock recommendations, compared with just seven last year, and has raised its view on only nine stocks as opposed to 25 last year.

Source: Credit Suisse

The number of target price upgrades versus downgrades also points to a disappointing reporting season, as does the overall number of buy, hold and sell ratings now found at Credit Suisse.

Equity strategist Hasan Tevfik says target prices are catching up to share prices but the reporting season provided little reason to upgrade ratings.

“Collectively Credit Suisse analyst target prices are just 2 per cent above the stock price, Mr Tevfik said, adding that this time last year the target price was 14 per cent above spot.

“The message from our analysts is clear… ‘There is much less bottom-up justification to buy the market now than there was 12 months ago’.”

So what’s the actual problem?

“Our quant analyst, Richard Hitchens, details the reporting season [profit and loss] and finds clear themes of weak revenue growth, cost cuts slowing leading to lower EBITDA margins, and a rise in lower quality items,” Credit Suisse said.

“Companies disappointed expectations and show no profits growth in the near-term. There is little here to justify the 18x PE [price to earnings ratio] the ASX 200 is currently trading on.”

9.50am:Is the Aussie headed below US75c?

The Australian dollar could probe sub-US75c this week as the theme of divergent monetary policies looks back in vogue after the Jackson Hole central bankers meeting, according to NAB. While holiday-affected markets in the Northern Hemisphere and uncertainty about Friday’s US payrolls report will keep traders cautious this week, the US dollar is under renewed upward pressure after comments from Fed officials fuelled speculation of US rate hikes this year. Meanwhile, comments from Bank of Japan and European Central Bank officials suggest they are prepared to further loosen their monetary policies.

The US dollar has remained near a two-week high this morning after rising about 0.8 per cent on Friday. AUD/USD has fallen to a fresh four-week low of US75.46c in early trade.

9.38am:Rinehart ponders Kidman bid

Gina Rinehart is mulling a bid for S. Kidman & Co. (AAP Image/Dave Hunt)

Mining magnate Gina Rinehart is poised to enter the race for the S. Kidman & Co pastoral empire, alongside Chinese conglomerate Shanghai CRED Real Estate, with a joint bid expected to top $300m.

The billionaire’s entry into the sales process would be the first serious ­attempt by an Australian during the most recent battle over ownership of the giant cattle portfolio.

Shanghai CRED, controlled by Chinese billionaire Gui Guojie, was a major party in the consortium that was twice knocked back by Scott Morrison in its ­attempt to buy Kidman.

9.25am:Beware the supercharged property market

Australians are racing for dwellings in the Sydney and Melbourne markets, despite their hefty pricetags. Are Scott Morrison and the RBA to blame?

As Robert Gottliebsen writes, Malcolm Turnbull, Bill Shorten and incoming RBA governor Philip Lowe have adopted a set of conflicting strategies that will see fourth house price rises in Sydney and Melbourne. This will soon spread to other cities.

It’s a bizarre situation made even worse by a set of top public servant advisers who, having watched on as their own superannuation nests were feathered, are advising on the destruction of parts of superannuation in the private sector that are contributing to the latest house price rise.

Our nation is now faced with the vast dangers caused by this mismatch of strategies from its leaders and their advisers.
Read more

9.10am:Broker rating changes

Retail Food Group cut to Sell vs Buy — UBS

Regis Healthcare raised to Buy vs Neutral — UBS

Duet Group cut to Neutral vs Buy — Goldman Sachs

Corporate Travel cut to Hold vs Buy — Bell Potter

Breville Group cut to Hold vs Buy — Wilsons

Monash IVF cut to Neutral vs Outperform — Macquarie

AWE cut to Underperform vs Neutral — Macquarie

Coca-Cola Amatil raised to buy vs neutral — Deutsche Bank

Super Retail Group raised to buy vs neutral — Deutsche Bank

8.50am:McAleese enters administration

Mark Rowsthorn’s McAleese has collapsed into administration. Picture: Dan Himbrechts

McAleese has collapsed just hours before a shareholder meeting that had the potential to oust five of the embattled group’s six directors, including chief executive and former rich lister Mark Rowsthorn, writes Daniel Palmer.

The transport group had been battling a backlash from shareholders over a proposed company-saving recapitalisation plan with Hong Kong debt trader SC Lowy, but investors will not be given the opportunity to vote on the plan after administrators McGrath Nicol were called in this morning.
Read more

8.33am:Stocks to ease into the week

Aussie stocks could inch lower at the open as the last few earnings reports cross the finish line.

The local SPI200 is pointing to a 0.1 per cent slip at the open but fair value suggests a 0.3 per cent fall is more likely, according to Bloomberg.

BHP Billiton is looking to jump 1.7 per cent at the open, according to miner’s ADRs, which would come despite a 3.8 per cent fall in the price of iron ore in the most recent session and a 1.1 per cent drop in the oil price today.

Last week saw the ASX200 trickle 0.2 per cent lower to last trade at 5515.5 points, with ANP Outdoor turning more than a few heads with a 36 per cent fall.

Blackmores tumbled 21.7 per cent and market darling Aconex slumped 14.3 per cent over the week.

On the positive side, Altium roared 27 per cent higher, Southern Cross Media gained 12.9 per cent and Metcash grew 9.9 per cent.

8.20am:Is China’s formula boom over?

China’s infant formula boom, which has created overnight millionaires in Australia and put a rocket under the share prices of local producers like Bellamy’s and A2 Milk, could be heading for a messy and painful slowdown after one of China’s biggest baby milk powder makers warned of diving sales and intensifying competition ahead of tighter regulations.

There are also early signs the roaring vitamin trade into China might also have peaked as Swisse Wellness — one of the fastest-growing players in the Chinese vitamins market — reported fading sales in the two months to June 30.

Biostime International, which last year paid $1.67 billion for Swisse Wellness and is the third-biggest player in the Chinese infant formula market, presented a bearish assessment of both health products markets, raising fears the twin bubbles may be deflating.
Read Eli Greenblat’s full report

8.05am:Meriton’s $100m payday

Harry Triguboff’s Meriton Group sold more than $100 million of apartments at the weekend. Photo: Jerad Williams

Developer Harry Triguboff’s Meriton Group sold more than $100 million of apartments at the weekend launch of its biggest project to date: the 3000-unit Pagewood Green in Sydney’s eastern suburbs.

Meriton’s sales director James Sialepis said the project was brought forward because demand was strong, with pre-sales accounting for about half of the 236 apartments launched in stage one.

“We judged, contrary to those who have had doubts about the strength for the Sydney market, that there was an unsatisfied ­demand for new apartments, ­especially bigger ones,” Mr Sialepis said.

7.45am: Packer sells $450m in Crown shares

James Packer has moved to reduce debt and restructure the capital position of his flagship private company with the sale of around $450 million worth of shares in the listed Crown Resorts, Damon Kitney writes.

Consolidated Press Holdings yesterday sold 35 million Crown Resorts shares at $12.80 to institutional investors via UBS. The sale price was a 5 per cent discount to Crown’s closing price on Friday.
Read more

7.10am: Stocks tipped for lacklustre start

The Australian market looks set to open flat after Wall Street closed modestly lower following a volatile session.

At 6.45am (AEST) today, the share price index was down four points at 5,482.

In the US, the S & P 500 rose after Fed Chair Janet Yellen on Friday said the case for raising rates had strengthened, but did not indicate when the Fed would act. Yellen told a gathering of central bankers from around the world in Jackson Hole, Wyoming, the US economy was nearing the central bank’s goals of maximum employment and price stability but that future hikes should be “gradual”.

Stocks later traded lower after hawkish comments from Fed Vice Chair Stanley Fischer raised the possibility of a rate rise as soon as September.

Locally, in economic news today, the HIA new home sales figures for July are due out.

In Australia, the market on Friday closed down ahead of the speech by Ms Yellen.

The benchmark S & P/ASX200 index was down 26.4 points, or 0.48 per cent, to 5,515.5 points.

The broader All Ordinaries index fell 24 points, or 0.43 per cent, to 5,607.4 points.

7.00am: Dollar back below US76c

The Australian dollar has fallen against its US counterpart.

At 6.37am (AEST), the local unit was trading at US75.60 cents, down from US 76.33 cents on Friday.

6.50am:Iron ore slips below $60

The iron ore price has dropped below the $US60 a tonne threshold for the first time in a fortnight amid news of fresh supply set to come online next year.

Iron ore fell 1.6 per cent to $US59.10 a tonne in the most recent session, from $US61.10 the previous day, according to The Steel Index — its third straight day of falls.

Read more