Short selling ban lifted, Anger over pension changes: Economy roundup

The sharemarket opened higher this morning after the Australian Securities and Investments Commission lifted the nine-month long ban on short-selling financial shares.

But the rise was short-lived, with investors worried about the gloomy outlook for US markets, where a wave of new economic data reports likely to drag down Wall Street over the course of the week.

The S&P/ASX 200 index was down 15.7 points or 0.4% to 3745.9 at AEST 12.20. The Australian dollar has remained steady at US78 cents.

Westpac shares lost 0.8% to $19.23, with Commonwealth Bank falling 1% to $35.17. AMP also lost 1% to $5.21 as Wesfarmers lost 1.7% to $20.45. Macquarie Group shares dropped 3.9% to $32.18.

New Zealand based Fisher & Paykel has requested a trading halt, with the appliances group to resume trading on 27 May or when an announcement is made.

Gaming company Crown said it will have its executive share plans as a result of the Federal Government’s budget changes to employee share schemes.

“This decision has been made having regard to the underlying objectives of the ESP,” Crown said in a statement to the Australian Securities Exchange.

The new changes will see the number of employees taking part in schemes dropping from 63 to 31, with just six million shares held by employees, down from 11 million. Crown is the latest in a string of companies to scrap or change employee share schemes.

Qantas Airways will scrap first-class services on some international flights, The Australian said, as a cost-cutting measure to battle the deteriorating economy and low tourist numbers.

The announcement will affect 747 flights on the Sydney-Buenos Aires, Sydney-San Francisco and Melbourne-Hong Kong-London flights between 6 July and 31 October.

Meanwhile, union groups have urged Prime Minister Kevin Rudd to abandon the Government’s plan to lift the pension age by two years to 67.

“It’s a bad policy,” Construction Forestry Mining and Energy Union national secretary John Sutton said. “I strongly anticipate the left would reject it as a policy. Many in the party would reject it as a policy. As far as I am concerned it is an industrial issue.”