Interpac Business and Migration Solutions Melbourne Australia

(July.28)

The Australian share market remains lower as fears over a pending US sovereign debt default pulled Asia markets down, with all local sectors trading in the red.

By midday, the benchmark S&P/ASX200 index was down 49.9 points, or 1.1 per cent, at 4,487.5, while the broader All Ordinaries index had dropped 50.7 points, or 1.1 per cent, to 4,561.9.

On the ASX 24, the September share price index futures contract had fallen 58 points to 4,454 points, on volume of 18,495 contracts.

Global share markets were looking past any positive news and focused on the debt talks in Washington ahead of Tuesday’s deadline for the US to raise its debt ceiling and avoid a sovereign credit default, City Index chief market analyst Peter Esho said.

‘‘Time’s running out and it’s really overshadowing everything else,’’ he said.

Wall Street indices plunged more than 1.6 per cent as the US edged closer to default and its economy showed more signs of deteriorating.

‘‘Until this situation is resolved, it’s very hard to buck the trend and have buying conviction,’’ Mr Esho said.

A sea of red spread over the local market, which may be buffered from further falls from weak offshore leads as more local companies begin reporting earnings, he says.

Macquarie Group plunged $1.30, or 4.43 per cent, to $28.03 despite maintaining its earnings guidance in defiance of fears of a sharp downgrade to its outlook in the face of uncertain and jittery global markets.

‘‘The consensus earnings estimates in the market for Macquarie are too high from what they’ve said today,’’ Mr Esho said.

Wesfarmers said sales at its Coles supermarket chain rose 6.7 per cent to $31.768 billion in financial 2011.

Wesfarmers shares lost 59 cents, or 1.96 per cent, to $29.495, even after the company’s annual sales results revealed a 6.7 per cent sales surge in its Coles supermarket chain.

Elsewhere, market heavyweight BHP Billiton lost 74 cents, or 1.72 per cent, to $42.26, and Rio Tinto fell $1.24, or 1.5 per cent, to $81.35.

Banks and financial stocks lost ground, with the big four banks led lower by Westpac, which fell 28 cents, or 1.33 per cent, to $20.74.Telstra was one of the few companies to make gains, adding one cent to $3.03.

Commonwealth Property Office Fund gained 3.5 cents, or 3.83 per cent, to 95 cents after announcing the sale of its Sydney building at 259 George Street for $395 million, a 15 per cent premium above book value.Selling pressure even hit gold stocks, with Newcrest down 46 cents, or 1.14 per cent, to $40.04.

At 12pm, the spot price of gold in Sydney was $US1614.30 per fine ounce, down $US10.15 from yesterday's closing price of $US1624.45.The Australian dollar’s spike to a fresh record high on Wednesday meant the gold price had declined in relative terms, Mr Esho said.

National turnover was 1.16 billion shares, worth $2.3 billion, with 193 stocks trading up, 732 down and 315 unchanged.