4:57pm:Australian shares have dropped for their sixth consecutive session, extending the recent run of losses to 4 per cent, as miners and energy stocks tumbled amid an ongoing rout in global oil prices and fresh data suggesting factory activity in China continues to slow.

The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each lost 0.7 per cent on Tuesday to 5152.3 points and 5131 points, respectively, as BHP Billiton tumbled to a fresh five-year low. Shares are now at their lowest point since February and are now 3.7 per cent lower in 2014.

Local stocks took a weak led from offshore after Wall St closed lower despite strong industrial production figures as dramatic falls in oil markets soured the mood. The Stoxx Europe 600 Index posted its biggest six-day sump in more than three years amid the oil rout.

“With weakness in commodity markets weighing on resources stocks, and while lingering concerns about capital requirements following the release of the financial system inquiry report continue to weigh on the banks, it is very difficult for the Australian market to push ahead,” Wilson HTM Investment Group senior investment manager Peter McManus said.

After sinking 1.3 per cent on Monday night, Brent crude oil fell another 0.6 per cent to a fresh five-year low of $US60.70 a barrel when the ASX closed on Tuesday.

Australia’s biggest oil producer Woodside Petroleum fell 2.6 per cent to $34.46 as the company agreed to pay Apache $US2.75 billion for stake in two liquefied natural gas projects.

Resources giant BHP Billiton dropped 3.2 per cent to $27.42, while main rival Rio Tinto lost 1.6 per cent to $52.65 despite the spot price for iron ore, landed in China, edging up to $US69.06 a tonne.

Junior iron ore producer Atlas Iron was the best-performing stock in the ASX 200, rebounding 7.4 per cent to 14.5¢. Atlas has lost 79 per cent since June amid a slump in iron ore prices.

In China on Tuesday, a closely watched survey of factory activity showed the sector unexpectedly shrinking for the first time in seven months. The flash HSBC/Markit manufacturing purchasing managers’ index fell to 49.5 in December, missing forecasts to remain steady at November’s final reading of 50.0.

4:54pm: And here are today's winners and losers...

 

Best and worst performers in the ASX 200 today.

4:30pm:Another tough day on the boards as further fall in oil prices and heavy selling in overseas sharemarkets has pushed the local ASX 200 index below below its October's low, extending the recent rout to 7.2 per cent.

The ASX 200 and All Ords both fell 34 points, or by 0.7 per cent, to 5152.3 and 5131, respectively.

After some relief yesterday, the energy sector resumed its steep slide, down 2.1 per cent, with Woodside falling 2.6 per cent and Oil Search 2.8 per cent.

Miners also felt the pain as investors sold resources stocks more generally. BHP dropped 3.2 per cent and Rio 1.6 per cent.

Banks provided little support, with NAB and ANZ flat and CBA and Westpac down 0.3 per cent. Macquarie fell 2.1 per cent.

Investors moved towards safety in the form of listed property trusts and utilities: Westfield gained 2.8 per cent and GPT Group added 3.4 per cent.

4:00pm: Australia is set for a slowdown in initial public offerings in 2015 after a record this year as lacklustre performances by recent listings and jittery stock markets caused by a slump in commodities prices cool investor enthusiasm.

IPOs have raised $US14.67 billion ($17.9 billion) so far in 2014, more than double last year's $US6.2 billion and eclipsing the previous $US11 billion record 17 years earlier, Thomson Reuters data shows.

The government's November divestment of health insurer Medibank Private, which raised $US5.7 billion  in Asia's biggest listing in two years, and other healthcare sector listings contributed in a major way to boosting the IPO totals.

But the healthcare IPOs' stock market performance has been mixed. Medibank and hospital operator Healthscope, which raised $6.8 billion between them in the two biggest listings of the year, are up 7 per cent and 19 per cent on their respective issue prices.

The sector, though, also produced the biggest flop. Aged care provider Estia, which had the year's fourth-largest listing and one of its last, saw its shares fall sharply on debut to be 20 percent under its issue price within a week amid complaints the offer was overpriced.

In another late-year disappointment, construction software firm Aconex, which raised $US140 million in one of the country's biggest listings of a firm yet to turn a profit, fell 10 per cent below its issue price within days of its December debut.

"The market's shut for a period of time for anyone who thinks they can float anything," said Geoff Wilson, chairman of fund manager Wilson Asset Management. "It's going to be a tough economic time, so if you're going to the market it's got to be well priced and it's got to be a good quality business."

Healthcare IPOs have been mixed. Photo: Glenn Hunt

3:17pm:Morgan Stanley has cut its iron ore price forecasts for 2015 by 9 per cent to $US79 a tonne and for 2016 by 14 per cent to $US75 a tonne.

The low-cost supply surge led by Australia continues to alter the character of the industry’s supply side, Morgan Stanley analysts write in a note.

"Many mining operations that emerged over the past decade are unviable at current prices," the analysts write. The most exposed include low-grade operations in north-eastern China's Hebei province and small operations in Australia and Brazil, they say.

Morgan Stanley estimates more than 150 million tonnes per year of capacity has been cut as of this month, representing about 10 per cent of seaborne and Chinese production capability in 2014.

The analysts also say they expect 2015 to represent the peak in Chinese steel consumption and production.

More than 150 million tonnes of iron ore capacity has been cut due to plunging prices, Morgan Stanley estimates.

2:39pm: James Packer’s Crown Resorts has done a deal with bookmaker Matthew Tripp that effectively gives the casino operator control of his online betting start-up BetEasy.

The foray will give Crown access to rapid growth in fixed odds betting that is reshaping the $13 billion online wagering market, while the BetEasy business will be able to grow by marketing directly to some of Crown’s biggest gamblers.

The casino billionaire said in a statement that tapping into the assets of Crown and BetEasy will provide “significant benefits and opportunities for our existing and future customers.”

A new operating company, two-thirds owned by Crown and the rest by BetEasy, will be created. Both parties will put in working capital, but sources told Fairfax Media no money has changed hands in the deal.

2:33pm: Following on from that last post, here's a table showing how a motley collection of emerging market currencies (plus our very own Pacific Peso) have been doing against the greenback in the second half of this year.

Until recently it was really a story of the greenback strengthening against just about every other currency as the US economic recovery sparked talk of an earlier rate rise (Russia is of course a unique case amid the Western sanctions).

But after the oil price and other commodities really started tumbling, the selloff in EM currencies has been gathering pace amid fears of growing contagion.

2:01pm:Indonesia’s rupiah has plumbed fresh lows against the greenback, after sliding yesterday to its weakest close since the Asian financial crisis, amid speculation a selloff in emerging-market assets is gaining traction.

The rupiah fell 1.5 per cent to 12,896 per US dollar in morning trade in Jakarta, according to prices from local banks compiled by Bloomberg. That follows a 1.9 per cent plunge yesterday to the lowest close since August 1998. The Aussie rose 1.6 per cent yesterday to 10,490 rupiah.

The Indonesian currency’s drop was dwarfed by a 9.3 per cent decline in Russia’s rouble, which prompted the country’s central bank to raise its benchmark interest rate by 6.5 percentage points to 17 per cent. Turkey’s lira fell 3.3 per cent yesterday and South Africa’s rand lost 1.4 per cent.

Investors withdrew more than $US2.5 billion from US exchange-traded funds that buy emerging-market stocks and bonds last week, the biggest outflow since January.

‘‘This has spilled over into Asian currencies, which has seen the rupiah continuing to weaken,’’ said Khoon Goh, a senior foreign-exchange strategist at ANZ. ‘‘We have seen portfolio outflows from Indonesian bonds and equities, with thin liquidity due to the year-end exacerbating the moves.’’

Losing value: the Indonesian rupiah.

1:11pm: Completion of the NBBN negotiations at the weekend has prompted Bell Potter’s Charlie Aitken to dub Telstra "a growth utility with regulatory certainty".

It can grow its dividend and consider capital returns. The 'beacon of certainty' among blue chips looks a better investment than any Australian bank in the medium-term and will go to a premium, he told clients this morning.
 

• TLS is in an earnings per share (EPS) and dividends per share (DPS) upgrade cycle. That is becoming increasingly scarce in Australian domestic earnings stocks. As usual, the TLS analysts are myopic and don’t see the bigger picture of TLS’s growing relative and absolute attractions. The current buy/hold/sell ratio is 6/12/4 and median 12 month price target $5.52.
• Today I am going to upgrade my 12-month price target on TLS from $6.20 to $6.40 on the back of regulatory certainty and bond yield curves. My view on cash rate cuts is also playing a role in that price target upgrade. My $6.40 price target is 18.8x my FY15 EPS estimate of 34c. I am also UPGRADING my TLS FY15 DPS assumption from 31c to 32c on the back of regulatory certainty. $6.40 equates to a 5.00%ff yield on a 32c dividend estimate.
• If you look at the heavyweight ASX 20 leaders index the vast majority of stocks are either in a commodity price driven earnings and dividend downgrade cycle or are under a capital raising cloud, or in some cases, both. TLS stands out like a beacon of certainty in that ASX20 Leaders index and will be re-rated by relatively and absolutely. On my upgraded FY15 estimates TLS is currently trading on 16.8x and offers a prospective 5.57%ff yield.

 

Telstra shares are up 0.3 per cent at $5.76, after earlier in the session rising to $5.79, or within a cent of their recent highs. The stock has gained 9.4 per cent this year.

Telstra stands out like a 'beacon of certainty' among blue chips, Charlie Aitken says. Photo: Rob Homer

12:53pm: The Australian dollar slipped a quarter of a cent to a new four-year low, falling as far as 82.00 US cents, after the surprise drop in the Chinese manufacturing data.

12:52pm: Online retailer Surfstitch has made an underwhelming start on the ASX (code SRF), down 5 per cent on its listing price of $1 at 95c. The loss-making business was recently described by a major shareholder as having “Alibaba potential”.

The comparison, already stretched, looks even thinner after the contrasting fortunes of the two on first day trading: the Chinese e-commerce giant spiked 38 per cent on its first day of trading in New York a few months ago.

12:48pm:Activity in China's factory sector shrank in December for the first time in seven months as new orders declined, a preliminary private survey shows, adding to expectations that more stimulus may be needed to avert a sharper economic slowdown.

The flash HSBC/Markit manufacturing purchasing managers' index (PMI) fell to 49.5 in December from November's final reading of 50.0 and well below the 50.0 reading forecast by analysts. A reading below 50 indicates a slowdown, while one above 50 points to expansion on a monthly basis.

Underscoring the pressures facing China's economy, the new orders sub-index fell to 49.6, the first contraction since April. The level of output in factories also stayed below the 50 line for the second consecutive month.

The PMI report followed data last week that showed further signs of fatigue in the world's second-largest economy, with factory growth and investment expansion slowing in November.

After insisting for months that stronger stimulus wasn't needed, Beijing unexpectedly cut interest rates on November 21 to shore up the cooling economy and ease pressure on debt-laden companies. Many analysts see further easing in coming months.

12:39pm:Iron Mountain chief executive William Meaney said he sees little point in pursuing a takeover of Recall Holdings after the target rejected an initial $2.2 billion bid from the US paper storage giant.

Recall rejected the conditional $7-a-share cash and scrip offer on Monday and, in an unusual move, published detailed estimates of the synergies Iron Mountain could extract form the combination and the implications for the offer price.

In a statement to the New York Stock Exchange overnight, Mr Meaney stood by the original offer price.

“We believe our proposal accurately reflected the value creation potential of the combined businesses – and an appropriate allocation of the potential synergies between shareholders of both companies,” he said.

Recall said on Monday that the bid – comprising $404 million in cash and $1.82 billion of scrip – would create $US3.9 billion additional value and Recall shareholders would get less than 5 per cent of that extra value at $7-a-share.

The document management company, which was spun out of Brambles last year, estimated Iron Mountain could extract $US250 million in annual synergies from the deal.

Mr Meaney said his company is “very surprised” by the big estimate.

“Iron Mountain’s estimate of net synergies is substantially lower than Recall’s estimate, which additionally, does not include the substantial time and transaction costs required to realise those synergies.”

The difference in value expectations appears to be large enough that Mr Meaney threatened to walk away from further talks.

“We see little point in having further discussions with Recall regarding a purchase of the company given their estimates values,” he said.

Shares in Recall have pulled back 4.5 per cent to $7.05 after leaping 15 per cent to $7.38 yesterday.

12:13pm: The big money doubted Apple. this year. Oops.

“It’s been a really confusing year,” Kim Forrest, an analyst at Fort Pitt Capital Group, said. “There have just been a handful of stocks that drove the market and Apple was obviously one of them. It’s been tough.”

Aversion to the iPhone maker is turning out to be one of the worst blunders in 2014 for money managers, who are trailing benchmark indexes by the most in almost a decade. Shares of the world’s largest company rose four times more than the Standard & Poor’s 500 Index as CEO Tim Cook’s product plans eased concern over the company’s future growth.

Investors who clung to winners from the first five years of the bull market, from internet companies to small caps, got burned in the sixth as chipmakers, utilities and dividend shares rallied. In many ways, 2014 was the year of the hated stock. One of the best things you could’ve done was own companies with the highest short interest and the lowest analyst rankings, according to data compiled by Bloomberg. Such a strategy would’ve steered you to Exelon and Micron Technology, with average gains of 26 per cent since January.

Going against the grain now would lead you to buy energy shares, the industry whose 2014 loss is triple the next worst-performing group in the S&P 500. That’s what Bill Nygren is doing after his $US6.7 billion Oakmark Select Fund beat 97 per cent of its peers this year. Nygren bought Apache, a Houston-based oil producer, during the energy selloff as crude went from $US107 a barrel to $US56 in the past six months.

“Unloved companies tend to be the most interesting hunting ground for future outperformance,” Nygren said. “The reason that Intel and Microsoft were able to do so well is that they were so unpopular.”

Like their colleagues in the bond market, many equity managers entered the year believing economic growth would pick up and interest rates rise. They avoided defensive stocks such as power generators and loaded up on retailers and other industries that benefit when Americans spend money on nonessential goods.

Instead of rising, yields on 10-year Treasury notes fell to 2.11 pe rcent from 2.88 per cent a year earlier, as central banks from Europe and Japan boosted monetary stimulus in a bid to spur growth. That fueled a surge of at least 20 per cent in utilities and REITs, two groups whose dividends are among the highest. Consumer discretionary shares rose half as fast as the rest of the market.

Pedestrians walk past the Apple Inc. store in the China Central Mall in Beijing. Aversion to the iPhone maker is turning out to be one of the worst blunders in 2014 for money managers, who are trailing benchmark indexes by the most in almost a decade. Photographer: Tomohiro Ohsumi/Bloomberg

11:52am:The Reserve Bank felt a further decline in the local dollar was needed to help cushion the economy from falling resource prices when deciding to hold rates at record lows earlier this month.

In minutes of its December policy meeting, the RBA said its board had noted that financial markets were wagering on another cut in interest rates during 2015 and "discussed the factors that might be producing such an expectation."

The board at its December 2 meeting decided to keep rates unchanged at 2.5 per cent, where they have been for almost 16 months.

"Members considered that the most prudent course was likely to be a period of stability in interest rates," the minutes showed.

Financial markets recently moved to price in a further cut to 2.25 per cent following disappointing economic growth data.

However, in an interview last week RBA governor Glenn Stevens highlighted the limits of monetary policy, instead putting the onus on a weaker local currency to deliver any further easing.

The policy minutes showed the RBA still felt the Australian dollar was above most estimates of its fundamental value, particularly given steep falls in prices for some of the country's major commodity exports.

"Members agreed that further exchange rate depreciation was likely to be needed to achieve balanced growth in the economy," the minutes showed.

The dollar edged up slightly to 82.23 US cents on the minutes.

11:43am:Telstra has paid a $102,000 penalty for misrepresenting the price of its iPhone 6 plan.

The consumer watchdog issued the telco an infringement notice over a full-page ad in The Age newspaper in September.

The ACCC argued that Telstra prominently stated a monthly fee of $70, when the true price, including handset repayments, was $81.

ACCC chief Rod Sims warned businesses to be wary of using ‘‘attention grabbing’’ headline prices that may mislead people as to the true cost.

Telstra docked for misleading iPhone 6 ad.

11:28am: Junior producer Central Petroleum is cutting 40 per cent of its workforce after the collapse in the crude oil price, which has slashed revenues from its only producing oil asset, the Surprise field in the Northern Territory.

The 30 job losses are mostly consultant and contractor roles on site at the field, and the employment of traditional owners has been largely exempted, Central said.

It is applying for permits to be able to operate the field remotely from Alice Springs, reducing the need to employ workers at the remote field.

Shares are down 1 per cent at 9.9 cents.

11:13am:The Russian rouble has rebounded from record lows after the Russian central bank in a surprise move hiked interest rates to halt a collapse in its currency.

The rouble traded at 60.00 to the US dollar after falling to as low as 67.1375 on Monday.

The Russian currency had tumbled over 50 per cent against the US dollar over the past half year on plunging oil prices and the West's sanctions linked to the Ukraine crisis. It jumped after the Russian central bank hiked its key interest rate to 17 per cent from 10.5 per cent.

"This is definitely a step in the right direction. The real interest rate right now is significantly positive, 7 to 8 per cent," said Jorge Mariscal, chief investment officer for emerging markets at UBS Wealth Management in New York.

Still, the fate of the rouble - and of many other commodity currencies - rests on the price of oil, which showed no signs of bottoming out yet.

US crude futures fell 3.3 per cent on Monday after OPEC once again said it will not cut oil output despite a global supply glut, and a UAE official opposed holding an emergency meeting of the producer group to support prices.

"As long as oil prices keep falling, the rouble will stay under pressure. We have to see whether the latest rate hike will turn around the rouble," said Shin Kadota, chief FX strategist at Barclays in Tokyo.

Plunging oil prices are hurting commodity currencies, with the Canadian dollar sliding to five-year lows and the Australian dollar at 4-1/2-year lows.

10:55am:BHP has fallen further below the $30-mark to a fresh five-year low and is currently by far the biggest weight on the benchmark index, down 2.75 per cent for the day at $27.55, shaving 10 points off the ASX200.

Other resources stocks are also tanking, with Woodside down 1.9 per cent, Rio falling 1.3 per cent, Newcrest losing 2.8 per cent and Santos down another 2.1 per cent.

Banks are mostly lower, with Westpac off 0.7 per cent, ANZ slipping 0.4 per cent, CBA down 0.2 per cent, but NAB gaining 0.25 per cent after it sold a parcel of higher risk loands.

Telstra, meanwhile, is continuing its rise, gaining 0.35 per cent to $5.76.

‘‘There are very few bright spots,’’ IG market strategist Stan Shamu says.

With the market down more than 6 per cent since the start of November, investors lacked the confidence to invest in it at the moment, Shamu says. ‘‘There doesn’t seem to be much to inspire investors to dive into markets just yet ... it’s basically like trying to catch a falling knife."

Winners and losers among the top 200 this morning.

10:16am: The sharemarket has opened lower, putting it on track for a sixth straight fall.

The banchmark S&P/ASX200 is down 26.6 points, or 0.5 per cent, at 5159.5, while the broader All Ords has lost 25.9 points, or 0.5 per cent, to 5138.7.

Among the sectors, energy is leading the way down, slumping 2.3 per cent after the oil price took another hit overnight. Materials have dropped 1.8 per cent and financials are down 0.3 per cent.

10:12am: The unambiguous strength in the US economy - multi-year high readings on US industrial production and capacity utilisation were the latest data pointing to a strengthening recovery - may give the Fed plenty to talk about at its meeting tonight, but a reversal in energy markets from gains to further dramatic losses soured the session and dragged equities to lows, which will weigh on the local market, CMC chief market strategist Michael McCarthy says:

• The falls in industrial commodities and share markets come in spite of improving data from Japan, China and the US. This suggests the main driver is concerns about the effect of withdrawal of the historic monetary stimulus from the Fed.
• In anticipation of a draining of the global bathtub, investors are locking in share gains and withdrawing from commodity markets. During the height of stimulus, bad news was good news, as investors anticipated further funds injection. Now, good economic news is bad news, as markets bring forward the withdrawal timetable.
• Unusually for this time of year, volatility is on the rise. Locally, this is the last full week of liquidity as futures and options expire, potentially exacerbating selling pressure. A full calendar of data releases and a US Fed FOMC meeting tonight mean the holiday season may be cancelled for traders this year.

9:58am:Chinese appetite for Australian coal is expected to keep growing at a steady pace, with a new report predicting that while the pace of growth will slow, demand will continue to march higher with the help of a lower currency over the next five years, surpassing the 9-billion-tonne level by 2019.

Australia is set to account for the largest growth in coal exports as Indonesia slows its global output as a result of higher domestic demand and government policies, according to the International Energy Agency’s annual Medium-Term Coal Market Report.

The world’s biggest producer of seaborne thermal coal, Glencore, has estimated earlier this year that sliding commodity prices and high costs had rendered about 36 per cent of Australian coalmines unprofitable. Rio Tinto is one of the country’s largest coal companies.

While coal prices have declined since last year, the report notes several factors which are likely to help producers withstand further economic pain.

“Our analysis shows that the price floor provided by production costs has decreased significantly, not only because producers reduced costs by gaining economies of scale, better management and budget discipline, but also due to external factors,” said Keisuke Sadamori, Director of Energy Markets and Security at the IEA.

“Depreciation of local currencies in the main exporting countries has been significant and low oil prices also help, as oil represents a significant share of coal costs, especially in open-pit operations.”

The IEA report said that despite China’s efforts to moderate coal consumption it will still account for three-fifths of global demand growth in the years ahead, as the world’s second largest economy shifts towards an economy driven by consumption rather than building infrastructure.

9:54am: In local corporate news, Woodside Petroleum has agreed to pay about $US2.75 billion for Apache’s stakes in two liquefied natural gas projects, in Australia and Canada, to add production growth, but the slump in oil prices has delayed the timing for the Browse floating LNG venture in Western Australia.

The acquisition of the stake in Chevron’s $US29 billion Wheatstone LNG project in Western Australia is set to increase Woodside’s production starting in 2016 when the venture is scheduled to begin production.

The move to add assets to boost production follows Woodside’s decision in May to abandon a planned $US2.5 billion investment in an Israeli gas field, which had been seen as a significant growth project for the cashed-up Australian company.

Apache’s proposed 10 million-tonnes-a-year Kitimat venture on Canada’s Pacific coast, where Woodside will take over 50 per cent of the project alongside Chevron, is at a much earlier stage and is yet to begin construction.

The deal, announced overnight Australian time by Apache, includes the US player’s exploration acreage in the Horn River and Liard basins in British Columbia, giving Woodside its first upstream gas position in western Canada, where it has been working to progress its own LNG export terminal in British Columbia.

Here's more

The acquisition of the stake in Chevron’s $35 billion Wheatstone LNG project in Western Australia is set to increase Woodside’s production.

9:24am:Russia’s central bank has raised its benchmark interest rate to 17 per cent from 10.5 per cent at an unscheduled meeting after the rouble fell the most in 16 years.

The bank increased borrowing costs to limit the currency’s drop and inflation risks, it said in a statement on its website today.

The rouble jumped against the US dollar on the surprise move, rising to 62.50 per greenback, from 65.50 before the hike.

‘‘While such drastic tightening measures will inflict more pain on the economy, we have been arguing for a while that it is not about preventing recession, but a full-scale financial turmoil caused by the precipitous rouble fall,’’ said Piotr Matys, a currency strategist at Rabobank in London.

Russia’s central bank raised interest rates for the sixth time in 2014 after more than $US80 billion spent from its reserves failed to stop a 49 per cent selloff of the rouble, the world’s worst-performing currency this year.

President Vladimir Putin, whose incursion into Ukraine’s Crimea peninsula in March prompted the US and its allies to strike back with sanctions, this month called for ‘‘harsh’’ measures to deter currency speculators.

 

The greenback has nearly doubled in value against the rouble this year.

9:21am: Swiss chocolate company Lindt has expressed sadness and disbelief at the siege at its Sydney store,  which ended with three dead this morning.

Ernst Tanner, chairman and group CEO Lindt & Sprüngli, said: “I cannot believe that such an act of violence happened. I would like to express my deepest sympathy to the victims and their families. In these difficult times we all need to stand together in order to defend the values of freedom, peace and tolerance.”

The company said its shop was "chosen in such a random way." Lindt paid tribute to the courage of the victims and their families, thanked the police, and said it was grateful for the "support we received from the public in Australia and from all around the world."

Local CEO Steven Loane said, "Lindt & Sprüngli will provide any support to the victims and their families, and indeed to all our employees affected by this event."

Here are more updates on the end of the Lindt cafe hostage drama

9:09am:NAB has taken another step in its bid to exit the British market, selling a £1.2 billion parcel of higher risk loans from its UK Commercial Real Estate portfolio to an affiliate of Cerberus Global Investors.

The sale reduces the balance of the portfolio to £836 million, compared to the original balance of £5.6 billion in October 2012 when the run-off portfolio was first established.

NAB said will book a small gain on the transaction and about £127 million of capital will be released for the NAB Group when the deal is complete.

Chief executive Andrew Thorburn said the sale meant that the bulk of the non-performing loans in the CRE portfolio have been sold.

“This is an important step forward, effectively bringing closure to one of our legacy positions. The sale of these higher risk loans in the NAB UK CRE portfolio is another important milestone in our strategy of reducing our low returning legacy assets and sharpening our focus on our core Australian and New Zealand franchises,” Thorburn said in a statement.

9:05am: It was a terrible night in overseas markets, after US stocks retreated, sending the Standard & Poor’s 500 Index to its fifth drop in six sessions, as the continuing sell-off in oil overshadowed a surge in industrial production and corporate deals.

Across the pond, European stocks reversed an earlier advance, posting their biggest six-day slump since August 2011, after data showed a decline in manufacturing for the New York area and oil prices resumed a decline.

UK stocks fell for a sixth day, reversing earlier gains and closing at their lowest level since June 2013.

With today’s 2.2 per cent slump to 323.3, the Stoxx Europe 600 Index has erased its annual increase, closing at its lowest level since Oct. 20. The gauge reversed an advance of as much as 0.8 per cent today as the Federal Reserve Bank of New York’s Empire State Index unexpectedly dropped this month and oil prices erased gains.

“The unexpectedly weak Empire print could cap the upside on equities,” said Ioan Smith, managing director at KCG Europe in London. “It could have set the tone for manufacturing this month, especially amid worries over slowing global growth.”

The S&P 500 fell 0.6 per cent to 1,989.4, falling below its average price for the past 50 days. The gauge lost as much as 1 per cent today, slipping below its 100-day moving average before paring the decline. It has lost 4.1 per cent since closing at a record on Dec. 5.

“People are going to come into these markets looking at the same things they did last week, oil and secondary interest rates,” Randy Frederick, managing director of trading and derivatives at Charles Schwab, said. “To me, the oil selloff is a bit overdone and people’s reactions are a bit negative to it. We need to see stability in oil that lasts a couple of days. If we get that, people will stop being concerned.”

9:03am: Local shares are poised to fall at the open as oil extended its slump, weighing on global equities. Shares in both Rio Tinto and BHP Billiton ended lower in London.

What you need2know:

• SPI futures down 33pts at 5144

• AUD at 82.19 US cents

• On Wall St, S&P 500 -0.4%, Dow -0.4%, Nasdaq -0.8%

• In Europe, Euro Stoxx 50 -2.8%, FTSE -1.9%, CAC -2.5%, DAX -2.7%

• Spot gold down $US16.96 or 1.4% to $US1205.63 an ounce

• Brent oil down 65 US cents or 1% to $US61.20 per barrel

• Iron ore up 7 US cents to $US69.06/tonne

What’s on today:

• Australia: Reserve Bank minutes; Speech from RBA assistant governor Guy Debelle Roy Morgan weekly consumer sentiment

• China: flash manufacturing PMI at 12:45pm AEDT

• US: housing starts, building permits, flash manufacturing PMI

• Europe: flash manufacturing PMI

Stocks to watch:

• Woodside agrees to buy Wheatstone, Kitimat LNG from Apache for $US2.75b

• Rio Tinto, BHP Billiton, oil producers. In London, Rio fell 2.5 per cent, BHP slid 3.7 per cent.

• Iron Mountain disappointed that $7/share bid rejected by Recall, sees little point of further talks

• Alumina raised to outperform v neutral at Credit Suisse

• Echo, Iluka raised to neutral v underperform at Credit Suisse

• RBC Capital Markets has lowered its price target on BHP Billiton to $30 a share, from $37 and cut the miner to “underperfrom” from “sector perform”.

• Perpetual raised to buy v hold at Morningstar

• Ten Network raised to neutral v underweight at CBA

• Troubled miner Yancoal will not be able to push ahead with a planned $US2.3 billion rights offer after the Takeovers Panel ruled in favour of concerned minority shareholders.

• CIMB maintains an “add’ recommendation on Suncorp Group with a slightly lowered $15.00 target price, from $15.07 a share previously on the insurer and bank.

Read more.