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Australian share market pulled back by QBE

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The Australian share market is slightly lower as investors put aside good US jobs figures and strong Chinese trade data and focus on a shock profit warning from insurer QBE.

Shares of QBE plunged around 20 per cent after the company announced that it expects to post a $250 million loss this year.

IG market strategist Evan Lucas said the banks and major resources stocks were having a positive influence on the local bourse, with the Chinese trade balance figures boosting big miners such as BHP Billiton.

“But the story of the day is QBE,” Mr Lucas said.

“The market would have been stronger if QBE had not come out with this downgrade.

“It (the QBE announcement) is nothing short of a horrible update.”

On the Australian market at 1020 AEDT, QBE was $3.02, or 19.55 per cent, lower at $12.43.

QBE expects to post a $250 million loss this year due to writedowns and increased claims associated with its North American business.

Among the major banks, Westpac was seven cents higher at $31.58, ANZ had gained seven cents to $31.06, Commonwealth Bank had lifted 34 cents to $75.51, but National Australia Bank had dipped nine cents to $33.38.

In the resources sector, global miner BHP Billiton was up 19 cents at $36.94, and Rio Tinto had added 48 cents at $66.89.

On Wall Street on Friday, the Dow Jones Industrial Average gained 198.69 points, or 1.26 per cent, at 16,020.20 points after a better-than-expected November jobs report from the Labor Department.

The US jobless rate dropped to 7.0 per cent, a five-year low, from 7.3 per cent in October, and the economy added 203,000 jobs. The market had expected 180,000 new jobs.

In China, official figures released on Sunday showed that China’s exports grew far more strongly than expected in November while import growth weakened.

KEY FACTS

* At 1026 AEDT on Monday, the benchmark S&P/ASX200 index was 2.9 points, or 0.06 per cent, lower at 5,183.1 points.

* The broader All Ordinaries index was down 1.4 points, or 0.03 per cent, at 5,184.6 points.

* The December share price index futures contract was up four points at 5,188 points, with 10,079 contracts traded.

* National turnover was 284.2 million securities worth $535.9 million.