The world’s biggest miner was down by 2.5 per cent at noon, with other big miners feeling the gloom.
Brazil’s government says it will sue BHP and joint venture partner Vale for $US5.2 billion ($A7.19 billion) after the deadly collapse of a wastewater dam at their Samarco iron ore mine.
The lacklustre noon (AEDT) reading follows Monday data showing company gross operating profits rose 1.3 per cent in the September quarter, in line with market expectations.
But they were up only 0.1 per cent in the 12 months to September.
Investors will look to the Reserve Bank on Tuesday for any move in the official interest rate, but almost all expect it to remain at its record low of 2.0 per cent.
The S&P 500 in the United States was up just 0.1 per cent while the Dow Jones was down just 0.1 per cent.
Continued weakness in commodities weighed on the market at the open, with the mining sector extending its fall over the past month.
“The mining sector’s the worst performer by far today, holding things back and down almost two per cent today,” said Commsec markets analyst Stephen Daghlian.
“This takes the losses to almost 12 per cent for the month.”
He said BHP Billiton continued to drag down the sector following news the Brazilian government planned to sue it and fellow miner Vale SA for $US5.2 billion ($A7.19 billion) over the Samarco mine disaster.
BHP shares were down 32 cents at $18.45, while rival Rio Tinto fell 77 cents to $45.45 and Fortescue Metals lost five cents to $20.02.
The rest of the market was a little sluggish with the big four banks a mixed bag. Commonwealth Bank and Westpac were both slightly lower while ANZ and NAB were a little higher.
Big moves on the market included Dick Smith shares slumping by more than 60 per cent after the electronics retailer abandoned its profit forecast. Its shares had halved to 33 cents by 10.52am (AEDT).
But, law firm Slater and Gordon rebounded from its 75 per cent dive last week to be up 41 per cent, at 1040 AEDT after its board reiterated that its operations wouldn’t be affected much by proposed changes in UK compensation law.
Meanwhile, supermarket wholesaler Metcash had added 19.25 cents to $151.25 after a 20 per cent increase in first half profits.
At 8.10am (AEDT) on on Monday, the local unit was trading at 71.93 US cents, down from 72.30 cents on Friday.
And the Australian share market looks set to open flat after Wall Street closed little changed in a shortened session a day after the Thanksgiving holiday.
The December share price index futures contract was unchanged at 5,207.
The Australian market looks set to open flat after Wall Street closed little changed in a shortened session a day after the Thanksgiving holiday.
In economic news on Monday, the Reserve Bank of Australia releases financial aggregates for October while the Australian Bureau of Statistics releases business indicators for the September quarter.
Meanwhile, the TD Securities-Melbourne Institute inflation gauge for the month just ended is due out, as is the HIA New home sales figures for October.
In equities news, Metcash is expected to post results.
NEW YORK – US stocks have ended little-changed in a shortened session a day after the Thanksgiving holiday, with retailers in focus as Black Friday sales kicked off the important year-end shopping season.
Investors shrugged off a steep plunge in Chinese stocks, sparked after authorities opened investigations into several brokerages.
“Unsurprisingly, the Friday session was very quiet with trading volume running well below average,” Briefing.com said.
“With nothing in the way of earnings or economic data to digest, traders will await Black Friday updates from retailers,” said Alex Eppstein at Schaeffer’s Investment Research.
LONDON – European shares have retreated, hit by a drop in shares of mining companies after a slump in Chinese equities. Anticipation of further stimulus by the European Central Bank next week helped to cushion the fall.
Mining stocks fell the most, declining 2.7 per cent. China, the world’s biggest consumer of metals, saw stocks slide over five per cent after a regulatory crackdown and deteriorating industrial profits data.
Anglo American led the decline, falling 8.2 per cent after shutting down an Australian coal mine.
“Miners are suffering from China and a stronger US dollar outlook. There is clearly a risk that China will try and devalue the currency further, but there is less risk of that compared to earlier in the year,” said Ankit Gheedia, equity and derivative strategist at BNP Paribas.
“(However) Europe is still trading on the ECB next week, which is why the market is relatively resilient.”
HONG KONG – A plunge in Chinese stocks has dragged Asian markets down with authorities investigating several brokerages and profits at the country’s industrial giants sinking more than expected.
With Shanghai slumping more than 6 per cent at one point, Friday’s sharp losses brought back painful memories of the panic-driven sell-off that struck China’s equities markets in the northern summer, wiping trillions of dollars off valuations.
Selling intensified on Friday after Beijing said industrial profits fell more than forecast in October.
Meanwhile, the country’s biggest brokerage Citic Securities on Thursday said it was being investigated for suspected “rule violations”, and on Friday another giant, Guosen Securities, said it was being investigated, while second-ranked Haitong Securities halted trading of its shares in Shanghai and Hong Kong.
“The biggest reason for such a sudden drop today is regulators’ investigation of the top brokers. It’s triggered a broader sell-off,” said Phillip Securities analyst Chen Xingyu.
“(The) investigation suggests the firms could be in some serious trouble,” he said. But he added Friday’s losses were “totally different from the routs in July and August”.
ENERGY
Oil prices have slid on concerns about an global oversupply as traders look ahead to next week’s OPEC meeting, sceptical the oil producers cartel will lower high output levels.
Energy economist James Williams, of WTRG Economics, said the market was paring down some of the surge in prices resulting from Turkey’s shoot-down on Tuesday of a Russian warplane on the Syrian border.
“Prices reacted up for a day or two, and we’ve just reversed this reaction, as there’s fundamentally no oil involved,” Williams said.
“The market is certainly looking ahead to next week’s OPEC meeting and sensing not only there’s going to be no change in OPEC oil production but also Iran will be rejoining the market in January with substantial quantities of oil,” said Andy Lipow of Lipow Oil Associates.
PRECIOUS METALS
Gold has dropped to a near six-year low, set for a sixth straight weekly decline under pressure from a firm US dollar and prospects of a US interest rate rise in December.
“The chatter is all about exchange rates … Gold is down on the dollar,” said Phillip Streible, senior commodities broker for RJO Futures in Chicago.
The Federal Reserve is widely expected to raise US interest rates for the first time in more than seven years when it meets next on December 15-16. Higher rates would rise the opportunity cost of holding non-yielding gold and could dent demand and boost the US dollar.
“The omens are not positive for gold in the lead-up to the December rate meeting,” Societe Generale analyst Robin Bhar said.
BASE METALS
Nickel has tumbled despite a group of Chinese producers saying they planned to cut output, on scepticism about whether the cuts would be implemented.
Eight Chinese producers including state-owned Jinchuan Group Co Ltd have said they would cut output by 15,000 tonnes in December and by at least 20 per cent in 2016.
“I think the market is waiting for those production cuts to be realised before pricing anything in,” said Eugen Weinberg, head of commodity research at Commerzbank in Frankfurt.
“The psychological stance of the market has changed. It doesn’t really believe in the news until it becomes a reality, especially if the news comes from China.”
Also hitting the market was a slide in Chinese shares by more than five per cent, their biggest drop since this summer’s rout.
VALLETTA – Maltese Prime Minister Joseph Muscat has unveiled a new $US1 billion ($A1.38 billion) Commonwealth Green Finance Facility to support environmental projects within the 53-nation bloc as the race against climate change intensifies.
BERLIN – A massive influx of refugees, and accompanying billions in public spending, have provided Germany with a long-awaited answer to partners’ calls for it to do more to jumpstart the eurozone economy.
MOSCOW – Russian President Vladimir Putin has signed a decree imposing economic sanctions against Turkey, four days after Turkey shot down a Russian warplane near the Syrian-Turkish border.
ASX stocks to watch
BHP – BHP BILLITON: Brazil’s government says it will sue mining giants BHP Billiton and Vale for $US5.2 billion ($A7.19 billion) after the deadly collapse of a wastewater dam at an iron-ore mine.
MTS – METCASH: Grocery wholesaler and marketing company Metcash is expected to post results on Monday.
INDEX CLOSE MOVE
Dow Jones 17798.49 -14.90
S&P500 2090.11 1.24
Nasdaq 5127.52 11.38
FTSE100 6375.15 -17.98
DAX 11293.76 -27.01
Shanghai 3556.99 -202.44
Hang Seng 22068.32 -420.62
NIKKEI225 19883.94 -60.47
ONE AUSTRALIAN DOLLAR BUYS:
0.7193 US DOLLARS
0.6795 EUROS
0.4783 UK POUNDS
4.6009 CHINESE YUAN
1.1010 NEW ZEALAND DOLLARS
METAL MOVE CLOSE
Gold $US/oz -13.50 1056.20
Copper $US/tonne 0.0085 2.0575
Iron ore $UStonne 0.52 44.50
OIL (US$/barrel) MOVE CLOSE
WTI -1.33 41.71
Brent Crude -0.60 44.86
AAP
