The Australian share market has opened 1.8% lower today, after disappointing results in the US where stocks fell due to concerns about the troubled banking sector.
The benchmark S&P/ASX200 index was down 86.7 points or 1.92% to 4427.9 at 12.00 AEST, with the Australian dollar also moving up to US83c after it was revealed the Australian economy grew by 0.6% during the June quarter.
Commonwealth Bank shares fell 2.1% to $45.33, with ANZ shares also falling by 3% to $21.35. Westpac shares dropped 2.9% to $24.13, while NAB fell 2.8% to $28.38 as it made an announcement regarding its dealings with the tax office.
National Australia Bank has written the carrying value of $390 million in receivables due from the Australian Taxation Office to nil, but it has said the announcement will not affect the bank’s earnings.
In a statement to the Australian Securities Exchange, the bank said it made the decision after a Federal Court ruling involving St George, a subsidiary of Westpac, which the bank said “may be unfavourable to NAB on the issue of whether interest payments on the ExCaps are generally deductible”.
NAB also said it will look at all avenues for appealing any decision by the ATO to disallow its move.
Big four dominate mortgage scene
Also in the banking sector, a new report shows the big four banks have written close to 100% of the $7 billion worth of new mortgages recorded in July.
According to the new figures from the Australian Prudential Regulation Authority, the banks’ combined share of the market has grown about 30% from this time last year.
Meanwhile, Australian Industry Group chief executive Heather Ridout has said the Federal Government must introduce industrial relations reform so current benefits are not lost.
In a blog with Business Spectator, Ridout says the building and construction industry contains low industrial disputation levels, strong wages and high productivity, but other legislative changes have not been successful.
“The construction industry has improved in recent years but there’s no doubt that the industry still needs to be treated as a special case with special laws designed to ensure the gains are not short lived,” Ridout said, also pointing to the findings of the Cole Royal Commission.
“The reforms introduced after the royal commission have largely removed the unlawful and inappropriate conduct that permeated the industry and which cost project owners (including governments), employers and the Australian community vast sums,” she said.
Telstra appoints new board members
Telstra has now appointed Russell Higgins and former chief executive of Ninemsn Steve Vamos to its board as non-executive directors, and announced that current member Charles Macek will not stand for re-election come this November.
“[Russell] has a wealth of experience in the energy sector, an area of the economy confronting challenges similar to those facing the regulated telecommunications industry,” chairman Catherine Livingstone said in a statement to the ASX.
“Steve has an exceptional knowledge of the challenges and opportunities of the Australian market, enhanced by his experience as a global executive at Microsoft.”
In the US, stocks fell on Wall Street for a third consecutive day on concerns about the troubled financial sector, and that a recent rally could be stopped by disappointing economic data.
The S&P500 fell below the 1000-point marker, moving down 22.58 points or 2.21% to 998, while the Dow Jones Industrial Average fell 185.68 points, or 1.96%, to 9,310.60.
The results came after some good economic data, with Hyundai recording a 47% increase in sales and Ford also recording a 17% increase in monthly sales.
Additionally, the Institute for Supply Management said its index of national factory activity grew to 52.9 from 48.9 in July – the first growth in over 18 months.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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