Australian Stock Market Report - Closing

Financials were the strongest performers, despite a dip in early trade in response to the weekend news that the government will be withdrawing the wholesale guarantee system put in place for the major banks following the financial crisis. The S&P/ASX 200 Financials Index rose 0.5pct with shares in Westpac (WBC) outperforming the market. WBC shares gained 2.8pct to $23.25 while the Commonwealth Bank (CBA) added 0.2pct to $52.77 and the NAB (NAB) increased by 0.6pct to $25.47. Shares in the ANZ Bank (ANZ) gained 0.3pct to $20.97 while Macquarie Group (MQG) firmed by 0.2pct to $50.35.

The materials sector added 0.4pct as the big miners advanced despite weaker metals trade in London. Both BHP Billiton (BHP) and Rio Tinto (RIO) report earnings results this week. Shares in BHP gained 0.1pct to $39.60 while RIO was firmer by 0.9pct to $67.18. Iron ore player Fortescue Metals Group (FMG) rose by 1.1pct to $4.56 and among the gold players, Newcrest Mining (NCM) was up 1.2pct to $31.52 while Lihir Gold (LGL) firmed by 1.8pct to $2.79.

The energy sector rose by 0.3pct as the price of oil rebounded in Asian trade. At 4pm AEDT the oil price was up 0.8pct to US$71.76 a barrel. The oil price has been boosted due to tensions over Iran's nuclear program and a cold snap in the northeast of America. Shares in Woodside Petroleum (WPL) rose by 2pct to $42.33 while Oilsearch (OSH) added 0.4pct to $5.18 and Caltex (CTX) was firmer by 0.5pct to $8.97. However shares in Santos (STO) eased, down 0.4pct to $13.15 despite increasing its oil and gas reserves to record volumes, driven by the growth of its liquefied natural gas (LNG) portfolio.

Media stocks received a boost on news licence fees would be reduced for the next two years in a bid to lift investment in locally produced content and help fund the switch to digital television. Shares in the Ten Network (TEN) rose 9.6pct to $1.66 while the Seven Network (SEV) gained 2.4pct to $6.88.

Retailer JB Hi-FI (JBH) fell 5.1pct to $19.07 as news the retailer's CEO will retire in the middle of the year took away from JBH's record 1H profit. Net profit rose 29pct to $76 million, with JBH declaring an interim dividend of $0.33 per share, up 120pct. Richard Uechtritz will leave the company in July / August to pursue personal and philanthropic interests and will be replaced by Chief Operating Officer Terry Smart.

Defensive stocks were generally lower. Telstra (TLS) lost 0.9pct to $3.36 while Woolworths (WOW) dropped 0.6pct to $25.52 and CSL Limited (CSL) fell 1pct to $31.24.

In economic data today, latest data from the Australian Institute of Petroleum showed the national average price fell by 0.8 cents to 123.9 cents per litre. Over the past three weeks the national petrol price has fallen by 3.7 cents a litre, marking the biggest fall in more than three months. Over the past month the Singapore unleaded price has fallen by more than 7pct. However the substantial 6.4pct fall in the Australian dollar in the same period is likely to drive up petrol prices in coming weeks. CommSec would expect pump prices to rise by 2-3 cents over the next fortnight.

The Olivier internet job index rose by 3.6 per cent in January, the fifth increase in the past six months. Demand for staff was greatest in ancillary services like Human Resources, Administration and Clerical.

The Australian dollar eased further against the major currencies and at 4.30pm AEDT was worth US86.62c, £0.5553 and €63.5c.

On the market overall, a total of 2.57 billion shares were traded, worth $4.19 billion. 513 were up, 559 were down and 340 were unchanged.

At 4.30pm AEDT on the Sydney Futures Exchange, the Share Price Index (SPI) futures contract was at 4474, down 1pt.

No major economic data is scheduled for release in the US tonight.