BusinessNow: Live coverage of financial markets and companies, plus analysis and opinion
Biotech giant CSL is still out of favour, while Origin scrapping its dividend hasn’t gone down well with shareholders.
- NAB, Westpac to fight US class action
- Aussie banks to face rate rig suit in US
- Unemployment rate falls to 5.7%
- ASX slides in early trade
- Origin scraps dividend after loss
- AMP shares slump
- Take profit on Brambles
Welcome to the BusinessNow blog for Thursday, August 18. CSL and AMP are getting hammered as investors vent their frustration at dismal earnings, Origin has scrapped its dividend and Australia’s unemployment rate is down to 5.7 per cent.
6.44pm:Why the RBA is so uneasy about the Aussie
The RBA is much more uncomfortable about the Aussie than it has let on, says funds manager QIC, one of the country’s biggest government pension managers.
Trading at US77.00 cents late on Thursday, the Australian dollar may be as much as 10 per cent overvalued as measured by the Reserve Bank of Australia’s in-house economic modelling, a level sure to be “really tough” for exporters, said Katrina King, head of global liquid strategies at QIC.
“They haven’t been publicly articulating that, but we have a very similar model to them, and it’s very terms-of-trade related, and it’s way above value at the moment,” she said. Read more.
5.06pm:PPB wins lenders mandate for Bis Industries.
More to come
5.17pm: PPB fends off rivals for Bis Industries role
Lenders to the troubled Kohlberg Kravis Roberts mining services provider Bis Industries has appointed PPB as an adviser.
PPB’s appointment was revealed by The Australian’s BusinessNow blog and sees the insolvency firm fend off competition from its other peers and boutique advisers such as Fort Street.
It comes after DataRoom revealed earlier this week that Moelis and Gilbert + Tobin had been hired by BIS as it negotiates with its lenders.
Some are now betting that the company, which has faced challenges linked to the resources industry downturn, could be subject to a recapitlaisation plan, or a loan-to-own takeover by hedge funds.
The company made $116 million in earnings before interest, tax, depreciation and amortsation in the 2016 financial year.
Causing a blow to BIS was the loss of a contract with Fortescue Metals, which represented about 25 per cent of its earnings, according to sources close to the company.
Bis specialises in custom off-road heavy haulage services for the mining industry.
It is understood that much of the company’s future now rests in the hands of its lenders, including ANZ, Commonwealth Bank, National Australia Bank and investment banks within the syndicate such as Bank of America Merrill Lynch and potentially still UBS and Goldman Sachs.
KKR has been battling to keep Bis afloat for some time and refinanced about $1bn worth of debt last year.
At the time, the understanding was that the deal would involve the financiers extending the loan period, and adjusting the covenants to provide more headroom.
KKR bought Bis Cleanaway from Brambles for $1.83bn in 2006 and in 2007, it sold the Cleanaway part of the business to Transpacific for $1.25bn.
Attempts were made to float the business for $1.5bn in 2013 through Bank of America Merrill Lynch, UBS and Goldman Sachs at about 10 times its earnings.
However, it failed to gain support from investors that were jittery on the back of the resources industry slowdown.
4:25pm:ASX closes weaker
The Australian sharemarket has weakened into the close despite a spread of good news on the earnings front and a fifth day of gains in crude prices, writes Daniel Palmer.
At the closing bell, the benchmark S&P/ASX 200 index backtracked 27.2 points, or 0.49 per cent, to 5,507.8, while the broader All Ordinaries index eased 20.8 points, or 0.37 per cent, to 5,607.3.
The energy sector showed the way for a second day, with recent gains extended by 0.6 per cent as crude prices continued their rally from recent multi-month lows.
Santos lifted 0.2 per cent to $4.95 after a red open, while Woodside gained 0.88 per cent to $28.55.
The laggard among the major gas players was Origin Energy, with the utility sliding 1.2 per cent after it decided to abandon dividends in a bid to recover from another heavy loss. Read more.
4:10pm:NAB, Westpac respond to US class action
National Australia Bank and Westpac have joined ANZ in confirming they are among the banks named in a US class action lawsuit over alleged manipulation of bank bill swap rates.
All three banks have said they will fight the lawsuit. CBA has yet to respond.
Read more
3:50pm:Leaders and laggards
For all the keen market-watchers out there, here’s today’s stock scoreboard. Treasury Wine and IRESS are leading the pack, while AMP and Primary Health are among those lagging.
3:30pm:MinRes lithium sale has investors salivating
Mineral Resources has rocketed to a more-than two-year high as investors lick their lips at the prospect of a $700 million asset sale.
MinRes has had a cracking year thanks largely to the insatiable appetite for lithium, which has seen the price of the metal surge over the past year due to the impact of the rapidly expanding electric vehicle market, which relies on lithium-ion batteries.
Shares in the company rocketed as much as 15.2 per cent higher today to a two-year high of $11.60 before cooling off. At just before 3:30pm AEST the stock was 4.9 per cent higher for the day at $10.57, which represents a 160 per cent year-to-date gain.
If the shares had sustained the 15 per cent gain it would have been the stock’s best day since 2008.
Read Paul Garvey’s report on the company’s full-year earnings numbers and proposed asset sale.
3:30pm:Free Netflix subs are coming for Telstra customers
Telstra will offer three-month free subscriptions to leading digital streaming services Netflix, Stan and Presto on selected mobile plans, as the telecommunications giant relaunches its entertainment package in the face of increased competition from rivals Optus and Vodafone,writes Jake Mitchell.
Telstra has packaged subscriptions to Presto, owned by Seven West Media and Foxtel, and Stan, a joint venture between Fairfax Media and Nine Entertainment, with mobile plans before but it has never bundled the three services at the same time.
Read more
3:15pm:Exposing private hospitals’ surgery cost gap
The difference in the cost of a hip replacement between private hospitals can be as high as $43,000, a new report reveals, writes Sarah-Jane Tasker.
Meanwhile a knee replacement can cost over $16,000 more at one private hospital than at another.
The stark difference in costs is revealed in a surgical variance report on orthopedic producers, released by Medibank and the Royal Australasian College of Surgeons.
Read more
2.50pm:Rail fail hits Downer profit
Downer EDI, one of Australia’s largest engineering contractors and train builders, has lowered its profit forecast for the 2017 financial year after failing to win a rail contract worth $2.30 billion.
Downer EDI (DOW) said it’s now targeting a net profit of $163 million in the year through June 2017 after it wasn’t chosen to build a new intercity train fleet in New South Wales.
The company had previously targeted a net profit of roughly $170 million in its current financial year.
Dow Jones
Read more
2.35pm:A Brambles master class in succession planning
John Durie has taken a close look at Brambles’ latest update and says Woolworths’ Gordon Cairns must be marvelling at what a well-handled succession looks like.
Granted, it helps when the company is being run well, as CEO Tom Gorman has demonstrably done at Brambles in his seven years in the job.
Read more
2.15pm:Can the market hold its head above 5500?
The big four banks and CSL are pulling the local market south this afternoon and have it looking in danger of closing below 5500 points for the first time in two weeks.
At 1:37pm AEST the S&P/ASX 200 was 0.5 per cent weaker for the day at 5506 points, with most blue chips other than miners doing some damage.
CBA fell 1.2 per cent, Westpac was down 1 per cent, ANZ fell 0.4 per cent and NAB gave up 0.6 per cent.
Biotech heavyweight CSL slumped 2.9 per cent, adding to yesterday’s dive, as investors continue to punish a grim 10 per cent slide in full-year profit.
Elsewhere, Telstra slipped 0.4 per cent and Wesfarmers lost 0.6 per cent as rival Woolworths picked up that percentage.
Treasury Wine is today’s best performer, AMP is limping along in last place and gold miners Northern Star and Evolution have both gained more than 4.6 per cent.
1.55pm:I love you, man: Treasury soaks up the spotlight
Treasury Wine investors are popping the bubbly today as the company’s shares surge 11 per cent to a record-high $10.61 following a corking full-year profit result.
The stock is up 11 per cent at 1:37pm AEST, compared with a benchmark ASX 200 loss of 0.5 per cent to 5506 points and the stock is on its way to its best one-day gain since January.
Profit attributable to members more than doubled to $179.4m in the year to June 30, compared with $77.6m in the previous year.
The owner of Penfolds and Wolf Blass attributed the improvement to volume growth and better price realisation in Australia and New Zealand, as well as increasing consumer demand for imported wine in Asia.
Read more
1.40pm:Aussie banks to face rate rig suit in US
Australia’s banks are set to feel the heat of the US legal system as a class action lawsuit is filed over alleged manipulation of bank bill swap rates, writes Daniel Palmer.
The action relates to 17 Australian banks and two international broking houses and was launched overnight by two US-based investment funds and an individual derivatives trader.
In a statement to the market this afternoon, ANZ confirmed it was one of the companies named in the suit, with its rival big four banks likely to also be involved.
Read more
1.20pm:Telstra hits mobile black spot milestone
Telstra has activated its 60th mobile base station as part of its commitment to the federal government’s Mobile Black Spot Programme, with residents in Woolomin in New South Wales set to receive better reception, writes Supratim Adhikari.
The telco is aiming to have a hundred stations ready for action by the end of 2016 and Telstra group managing director, networks, Mike Wright, said the project, which also involves Vodafone Australia, was already starting to make an impact in the bush.
Read more
1.00pm:No Aussie stocks have a $US100bn market cap right now
Fun fact: As of lunchtime today there are no Australian stocks with a market cap of more than $US100 billion.
Today’s 1 per cent fall from Commonwealth Bank, the biggest stock on the local index, has taken the total value of all the shares on issue to $US96.87bn ($125.6bn), down from $US100.34bn yesterday.
It’s head and shoulders above the rest of the market on the USD market-cap measure but Australia’s biggest bank looks petite compared with Wall Street’s heavy hitters.
If, hypothetically, CBA was the same size on the S&P 500 it would rank as the 47th largest company by market cap, slightly above Nike and three spots below McDonald’s Corp.
12.38pm:Treating the currency market like a casino
It’s always amusing to check in with the financial market gamblers. Nope, not talking about day traders, I’m talking about the actual novelty betting markets you can find on sites like SportsBet, TAB and Bet365.
Do the punters have a better idea of the direction of the Aussie dollar than economists? They seem to think so.
The favourite odds for the end-of-year Australian dollar exchange rate are noticeably different from the consensus estimates from economists.
If you look on SportsBet’s currency price betting markets you’ll see punters are backing an AUD/USD rate of between US75c and US80c for the end of the calendar year. That’s a 3-to-1 favourite.
Meanwhile, the consensus median and mean forecast for the Australian dollar to US dollar cross rate at the end of the year is US73c, according to 76 economists surveyed by Bloomberg.
That outcome is paying 4-to-1 odds with SportsBet.
Currency forecasting is a mugs game, which is why you can bet on it. But still, 76 economists (many of them representing places like CBA, Morgan Stanley, UBS etc) are making an educated guess on something you can punt on.
You’d have to think that’s a more informed punt than picking the second-favourite horse in the Melbourne Cup or the first goal at this weekend’s footy game, right? Then again...
12.15pm:Webjet gets into bed with Thomas Cook
Webjet has struck an agreement with British-based travel behemoth Thomas Cook to acquire part of its hotel business, in a deal which could see the Melbourne-headquartered online travel agency sell an extra £1 billion worth of hotel rooms in Europe annually, writes Lisa Allen.
“On an annual basis this is millions of three, four, and five star rooms across 15 markets in Europe,” Webjet chief executive officer John Guscic told The Australian.
The five-year deal, plus options, gives Webjet’s European online accommodation wholesale business Sunhotels access to 3000 hotels and will cost the company £1 billion.
Read more
11.32am:Australia’s unemployment rate went DOWN in July
Australia’s July jobless rate fell to 5.7 per cent vs the 5.8 per cent expected by the market, as 26,200 jobs were created versus 10,000 expected.
The rise in jobs created was purely due to a 71,600 jump in part-time jobs. Full-time jobs fell 45,400 in the month.
The Australian dollar jumped from US76.56c to US76.81c but might be limited by the “low quality” of the employment data beat. The participation rate stayed at 64.9 per cent in the month. The Australian dollar is currently at US76.77c.
11.23am:Coming up at 11.30am: July employment data
Domestic employment data are due at 1130 AEST, with the market expecting a 10,000 rise in jobs and a 5.8 per cent jobless rate for July, based on an unchanged participation rate of 64.9 per cent. Given that the RBA is now aiming to run the economy a bit hotter to get the inflation rate back to target, any significant disappointment with the jobs data could firm up the market-implied probability of a November rate cut, now at about 38 per cent according to Bloomberg.
With Fed officials talking up the chance of a September rate hike in the US, weak Aussie jobs data could see the Australian dollar fall toward uptrend support at 0.7523. Strong data on the otherhand could see it test resistance around 0.7755. AUD was last at 0.7665.
11.20am:CSL, AMP tank as investors toast Treasury
Biotech giant CSL, the eighth-largest stock on the ASX 200 by market cap, has lost 7.4 per cent in two days. That’s around $3.7bn wiped off the company’s shares.
CSL reported a 10 per cent slide in profit yesterday and investors fled. Clearly bargain hunters are nowhere to be seen today, with the shares down 2.5 per cent at 11am.
Treasury Wine Estates is being given a firm pat on the back by the market today, up 5.6 per cent, while AMP has tumbled 5.8 per cent after reporting a miss to expectations.
At 11am, the benchmark ASX 200 was 0.3 per cent lower for the day at 5516 points.
11.10am:Origin earnings guidance downgrade negative - RBC
Origin Energy’s guidance for FY17 underlying EBITDA (ex-LNG underlying EBITDA) of $1.8bn-$1.95bn compared to previous guidance of $1.9bn-$2.1bn, and the downgrade for the ex-LNG business “may be even more than stated above due to exclusion corporate costs of about $80m pa from revised guidance”, RBC analyst Ben Wilson says.
“We anticipate a negative reaction to the guidance downgrade pending further details on the drivers of the downgrade. We note that Halladale/Speculant production has been deferred by ~2 months which may contribute to part of the downgrade but not all.”
ORG was last down 2 per cent at $5.71.
10.57am:ASX slides in early trade
The Australian sharemarket has fallen in morning deals as investors digest the latest batch of earnings reports, writes Daniel Palmer.
At 10.20am (AEST), the benchmark S&P/ASX 200 index weakened 15.3 points, or 0.28 per cent, to 5,519.7, while the broader All Ordinaries index lost13.4 points, or 0.24 per cent, to 5,614.7.
In early deals the materials sector was outperforming, with BHP extending yesterday’s strong rally after the release of better-than-expected underlying earnings.
The miner recently traded up 0.29 per cent at $20.97, while Fortescue gained 0.55 per cent and Rio Tinto bucked the trend to slide 0.3 per cent to $49.41.
In energy, Santos slid 0.4 per cent to $4.92, while Woodside edged down 0.16 per cent to $28.255.
The laggard in the space was Origin Energy, which eased 2 per cent after it decided not to pay a dividend after declaring another heavy loss.
In finance, Commonwealth Bank gave back 0.5 per cent, while ANZ lost 0.1 per cent, with NAB and Westpac both hovering around the flatline.
The lacklustre start paled in comparison to the showing from AMP, which saw its shares tank 5 per cent after reporting a fall in underlying profit.
Other companies to report included pallets supplier Brambles, which lost 2.9 per cent as it announced the departure of chief executive Tom Gorman, while Whitehaven Coal advanced 2 per cent after topping estimates and Treasury Wine Estates soared 5.8 per cent as it more than doubled full-year earnings.
Elsewhere, construction and engineering group Cimic slumped 3.1 per cent after it revealed the boss of its part-owned subsidiary in the Middle East had been arrested.
Among blue chips, Telstra was steady at $5.44, while Qantas tacked on 0.15 per cent to $3.355.
10.43am:Origin scraps dividend after loss
Origin Energy has decided against paying a dividend after it reported a second straight loss of over half a billion dollars, as depressed oil prices crimped margins, writes Daniel Palmer.
Analysts had expected the group to offer a final dividend of 10c a share, but Origin said the current market environment was not conducive to a payout as it looks to shore up its balance sheet.
Read more
10.35am:Oswals, ANZ close to settling $1.5bn lawsuit
A settlement appears close in the $1.5bn lawsuit between Indian business couple Pankaj and Radhika Oswal and the ANZ bank, writes Ben Butler.
A source close to negotiations said an in-principle agreement had been struck but no paperwork had been signed.
Read more
10.25am:AMP shares slump 5% in early trade
After disappointing investors with its latest results, AMP shares opened down 5 per cent at a 5-week low of $5.50.
After being rejected from range resistance near $6.00 in recent weeks, the share price looks a sell or rallies to the top of the gap at $5.75, with a minor downtrend line coming in tomorrow at $5.80. AMP last traded down 3.6 per cent at $5.58.
The nation’s biggest wealth manager today unveiled a hefty fall in underlying profit as wealth management inflows shrink and as insurance claims surge, writes Michael Roddan.
AMP booked a net profit of $523m for the six months through June, a 3 per cent increase year-on-year. The group said its underlying profit was down 10 per cent as higher claims in its wealth protection business and volatile investment conditions hampered earnings.
10.18am:A fearless, and lonely, view on Fortescue
Macquarie analysts feel strongly that Fortescue Metals (FMG) can keep the good times rolling despite gaining almost 150 per cent in the year to date.
In fact, their latest research report – titled “Cash machine” – sees the Macquarie analysts maintain an ‘outperform’ rating and a $5 price target on the miner.
But they’re pretty much alone in their confidence; with Bloomberg data showing just three ‘buy’ ratings (including Macquarie), six ‘holds’ and ten ‘sell’ recommendations. The consensus 12-month price target is $3.83, more than 30 per cent below Macquarie’s.
“Iron ore prices continue to trade above our expectations and if sustained present material upside risk to our base case forecasts for FMG,” Macquarie said.
The negative is the supply response to persistently high iron ore prices, with junior miners with higher break-even levels finding themselves back in the game. It’s something causing serious concerns for the rest of the market, and while outlined by Macquarie, it isn’t detailed.
“Despite the positive sentiment, we suspect the upside to iron-ore prices is probably limited from here, with further supply side responses expected if iron-ore continues to hold around US$60/t,” Macquarie said.
Yes, the iron ore price has traded around $US60 a tonne in the last two weeks, a long way above Macquarie’s $US52 forecast for 1Q FY2017 and 25 per cent above its $US48 forecast for 2Q FY 2017, but the analysts are taking a staggeringly long view when it comes to Fortescue.
They say “iron ore is likely remain buoyant through to October” (six weeks away) but also say: “On a spot price scenario, the company’s cash generation is impressive and could see FMG become debt free if spot prices remained at current levels through to the end of 2018.”
Confidence not shared by the rest of the broker fraternity.
Fortescue Metals has gained 147.3 per cent in the year to date to last trade at $4.58 and a little over a week ago touched a one-year high of $4.71.
10.08am:Time to take some profit on Brambles - CLSA
It’s time to take some profit on Brambles given that its FY16 results were in line with expectations and the CEO has retired, CLSA analysts say.
While Graham Chipchase is a “credible replacement for Tom Gorman, “investors think very highly of the current CEO and will be wary around a new appointment, particularly because we will have a new CEO and CFO, both external appointments, over the next 12 months,” the analysts say.
They also express some doubt as to whether Brambles’ growth spurt is sustainable. BXB shares were down 2.4 per cent at $12.95 in early trading.
10.00am:Cimic exec arrested in Dubai
Engineering and construction heavyweight Cimic Group continues to be dogged by scandals, with the chief executive of one of its part-owned subsidiaries arrested in Dubai.
In a statement to the market this morning, Cimic said the head of Habtoor Leighton Group, in which it owns a 45 per cent stake, had been detained by Dubai police.
The group offered little information about the nature of the arrest of Jose Antonio Lopez-Monis, saying it would update the market when further information was available.
9.55am:More broker rating changes
QBE cut to ‘hold’ vs ‘buy’; target price cut 15 per cent to $10.85 - Deutsche Bank
ARB Corp cut to ‘lighten’ vs ‘hold’ - Ord Minnett
Stockland cut to ‘neutral’ vs ‘buy’ - Citi
9.45am:Whitehaven Coal swings back to profit
Whitehaven Coal has swung back to profit for the full-year after a horror period marred by heavy writedowns, as the coal sector suffered amid a broad commodities slump, writes Daniel Palmer.
For the year to June 30, Whitehaven (WHC) booked a profit of $20.5m, up from a $330.6m loss last year as revenues surged 52.6 per cent to $1.16bn.
The headline number topped forecasts for a more modest profit of $16.4m, although revenues were marginally shy of expectations.
Read more
9.35am:Corks popping at Treasury Wine
Treasury Wine Estates has continued its turnaround, more than doubling full-year profit to $179.4m in the year to June 30 on the back of strong earnings growth, writes Elizabeth Redman.
The winemaker (TWE) saw higher earnings across Australia and New Zealand, Asia, Europe and the Americas, a feat it has managed only twice since splitting from Foster’s in 2011.
Read more
9.25am:Lottery lifts Tatts revenue
Betting and lotteries company Tatts has logged strong results in its lotteries division, contributing to a solid gain in revenue despite profit being hampered by litigation and the sale of its UK slots, writes Michael Roddan.
Tatts (TTS) booked a net profit of $233.8 million for the year through June, a 7.2 per cent fall year-on-year, impacted by the company’s long running and now concluded pokies compensation litigation, and the loss arising on the sale of its UK slots operation, Talarius.
Meanwhile, analysts are still of the view that Tabcorp could revive merger talks with rival Tatts.
Read more
9.18am:Former Orica execs courted for Moly-Cop board
As revealed exclusively in DataRoom today, two former Orica executives, Andrew Larke and Patrick Largier, are being courted by the administrators of Arrium to become directors of its $1.5 billion subsidiary Moly-Cop, indicating plans for a stockmarket listing of the business are accelerating.
Moly-Cop, which makes steel grinding balls used in mining, is said to be the most lucrative part of Arrium’s operations and administrator Korda Mentha is considering a divestment of the asset, either through an initial public offering or a trade sale, to help pay down its $2bn-plus debt load.
9.10am:Brambles CEO heads for the exit
Brambles chief Tom Gorman will step aside next February to be replaced by former UK executive Graham Chipchase.
The move was unveiled this morning as the wooden pallets supplier (BXB) announced a solid lift in profit and predictions of another year of bumper sales growth.
Read more
9.00am:Broker rating changes
Bluescope raised to ‘overweight’ vs ‘equal weight’ - Morgan Stanley
QBE Insurance cut to ‘underweight’ vs ‘neutral’ - JP Morgan
CSL cut to ‘neutral’ vs ‘overweight’ - JP Morgan
CSL cut to ‘outperform’ vs ‘buy’ - CLSA
Fletcher Building cut to ‘underperform’ vs ‘outperform’ - CLSA
Primary Health Care cut to ‘sell’ vs ‘underperform’ - CLSA
BWX price target raised to $5.40 vs $4.65; ‘buy’ rating kept - CLSA
Stockland cut to ‘neutral’ vs ‘buy’ - UBS
8.50am:Super uncertainty hits AMP
The nation’s biggest wealth manager, AMP, has unveiled a hefty fall in underlying profitability as wealth management inflows shrink amid the government’s proposed superannuation shake-up, and as insurance claims surge, writes Michael Roddan.
AMP (AMP) today booked a net profit of $523 million for the six months through June, a 3 per cent increase year-on-year. The group said its underlying profit was down 10 per cent as higher claims in its wealth protection business and volatile investment conditions hampered earnings.
Read more
8.36am:Stocks set to edge higher following a mixed day for blue chips
Aussie stocks are heading for a positive open as investors eyeball a fresh round of earnings numbers, along with a positive finish on Wall Street.
The SPI200 futures closed 0.1 per cent higher but fair value suggests a 0.3 per cent rise at the ASX open could be more likely, according to Bloomberg.
BHP Billiton ripped 3.3 per cent higher yesterday following a well-recieved but haunting full-year loss, and looks set to ease into the session with a flat start, according to the stock’s ADRs. A rating upgrade to neutral at Macquarie yesterday could continue to give the mining giant a boost today, but a 1.9 per cent slide in the iron ore price won’t look so good.
It’ll be worth watching CSL today following a savage 4.5 per cent selloff yesterday. Investors were concerned about the strength of the biotech heavyweight’s guidance, but will the market smell a bargain this morning?
7.00am: Flat start tipped for stocks
The Australian market looks set for a modest, positive open following Wall Street’s reaction to Federal Reserve minutes suggesting interest rates could soon rise.
At 6.45am (AEST), the share price index was up two points at 5,513.
Locally, in economic news on Thursday, the Australian Bureau of Statistics releases average weekly earnings data, its Population by Age and Sex, 2015 survey and its Selected Characteristics of Australian Business report.
In Australia, the market yesterday closed flat as big losses by QBE Insurance, CSL and Commonwealth Bank were offset by gains among big miners and some financial stocks.
The benchmark S & P/ASX200 index was up three points, or 0.05 per cent, at 5,535 points.
The broader All Ordinaries index was up 2.4 points, or 0.04 per cent, at 5,628.1 points.
6.55am:Dollar slips against greenback
The Australian dollar has fallen despite the greenback’s weakening after minutes from the Federal Reserve’s July meeting showed that policymakers may be on the road to raising US interest rates.
At 6.35am (AEST), the local unit was trading at US76.51c, down from US76.72c yesterday.
6.50am: Iron ore slips, but stays strong
The iron ore price has edged back from yesterday’s three-and-a-half-month high but remains strong despite this week’s warning from BHP Billiton that more pain for the commodity could be ahead.
Iron ore fell 1.1 per cent to $US61.10 a tonne overnight, according to The Steel Index, from $US61.80 the previous day.
The move comes after mining major BHP effectively said the worst of the commodity rout was over, but warned this year’s strength in the iron ore price was temporary and unlikely to be sustained.
6.45am:Wall St edges up on Fed talk
US stocks ticked higher after the Federal Reserve released minutes from its July meeting that shed little light on when the central bank could next raise interest rates.
The Dow Jones Industrial Average gained 22 points, or 0.1 per cent, to 18574. Prior to the Fed minutes the blue-chip index was down 0.1 per cent. The S & P 500 added 0.2 per cent and the Nasdaq Composite was flat.
European stocks closed weaker ahead of the Fed release, although the London bourse had some support from encouraging jobs data.
6.35am: Fed aims to keep options open
US Federal Reserve officials sought to keep their options open at a July policy meeting as they tried to reconcile differences on the economic outlook and when to raise short-term interest rates.
Several wanted to wait until they were more confident inflation would rise to the Fed’s 2 per cent objective, while others believed the US is close to a fully recovered job market and a rate increase would soon be warranted, according to minutes of the Fed’s July 26-27 meeting released Wednesday.
Taken together, the meeting minutes suggested a rate increase is a possibility as early as September, but the Fed won’t commit to a move until a stronger consensus can be reached about the outlook for growth, hiring and inflation.
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