Australian Stock Market Report - Afternoon 11/25/2011

MARKET CLOSE (4.30pm AEDT)

So far, this certainly has been the sort of month we could have done without. The focus has been firmly fixed on any developments or headlines regarding Europe. Borrowing costs for European governments have remained at unsustainable levels and France's AAA credit rating has come until considerable scrutiny. The All Ordinaries index (XAO) fell by 1.4 pct or 57.7 pts to 4057.6.

Almost all regions of the market headed south today with the exception of the I.T sector thanks to a 0.3 pct gain from share registry, Computershare (CPU).

The S&P/ASX 200 Energy index (which shows us how the energy sector has performed) fell by 2.22 pct or 296.3 pts to 13038.6 and was the worst performing industry today. Oil and gas producer Woodside Petroleum (WPL) was the biggest contributor to the falls after slumping by 5.82 pct or $2.06 to $33.36. The company held its annual update with investors and disappointed the market after its expectations for oil production came in around 10 pct lower than forecast.

The S&P/ASX 200 Materials index (a measure of mining stock performance) dropped 1.26 pct or 135.7 pts to 10634.5. The world's largest miner BHP Billiton (BHP) fell 1.39 pct or 48 cents to $34.05 while RIO Tinto (RIO) lost 0.74 pct or 46 cents to $61.95.

Iron ore miner, Sundance Resources (SDL) entered a trading halt today. The Perth based company is developing a huge iron ore project in the Republic of Cameroon and Congo and is expected to make an announcement shortly. Chinese miner, Hanlong have already made an offer for the company however a number of people with links to the miner are being investigated for insider trading. This has contributed to the subdued nature of SDL share price.

Primary Healthcare (PRY) held its Annual General Meeting (AGM) meeting. The company is a service company to medical and healthcare professionals. It operates 87 medical centres and 161 diagnostic imaging centres (services such as x-rays and MRIs). PRY shares fell 3.96 pct or 13 cents to $3.15.

The S&P/ASX 200 Financials index (a measure of how financial institutions performed on the Australian sharemarket) fell 1.71 pct or 64.7 pts to 3727.3. The four major banks all lost ground with Commonwealth Bank (CBA) falling most significantly, down 2.6 pct or $1.21 to $45.39, National Australia Bank (NAB) fell 1.89 pct or 42 cents to $21.82, Westpac (WBC) dropped 1.27 pct or 25 cents to $19.50 while ANZ Banking Group (ANZ) eased 1.26 pct or 24 cents to $18.77.

The retailers have been one of the worst performers this week, this month and also this year. Some of the largest retailers such as David Jones (DJS) and Myer (MYR) have slumped by around 35 pct since the start of January 2011. This week David Jones (DJS) has been hit hard and has fallen by around 10 pct over the past two days. Yesterday, DJS disappointed the market yesterday by saying that sales at its stores fell by 11 pct between July and September.

Its competitor, Myer (MYR) has also fallen by around 35 pct and has been one of the worst hit this year. Today, the retailer held its Annual General Meeting (AGM) with shareholders and indicated that sales this year are likely to remain flat.

Tonight, Italy will release its latest report on retail sales and no major economic data will be issued in the U.S.

The volume of shares traded came in at 2.01 billion today, worth $5.68 billion. 344 shares were up, 672 finished weaker and 378 ended unchanged. Equity options expired yesterday and there tends to be higher volume around this time.

At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24 futures contract is down 0.12 pct or 5 pts to 3998.

Due to daylight savings, most major European markets are now trading between 7pm (AEDT) and 3.30am (AEDT). Futures in Europe are pointing to a weaker start to trade tonight.

The U.S sharemarkets were closed last night due to the Thanksgiving public holiday. Dow Jones futures are currently lower, indicating that U.S stocks could start in the red tonight when American markets open at 1.30am (AEDT). Due to the Americans going back an hour on November 5, U.S markets will be trading between 1.30am (AEDT) and 8am (AEDT).

Turning to currencies, the Australian dollar (AUD) has continued to lose ground and buys US97.04 cents which is around US8 cents lower than this time last month.

Steven Daghlian, Commsec Market Analyst

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