AFTERNOON REPORT
(4.30pm AEST)

Local stocks posted a slight win today, but importantly managed to hold onto yesterday's impressive gains, despite slight falls on Wall Street overnight. Sentiment was boosted by hopes European leaders will agree on a second bail-out package for Greece, while a disappointing flash read on China's manufacturing sector limited gains as markets around the Asian region fell. The All Ordinaries Index (XAO) rose 7.8pts or 0.2pct to 4626.2 while the S&P/ASX 200 Index (XJO) firmed by 6.3pts or 0.1pct to 4556.

Financial stocks were positive, however came off earlier highs, with the sector closing higher by 0.2pct. Shares in Westpac (WBC) closed slightly lower at $21.14, while the Commonwealth Bank (CBA) added 0.4pct to $49.74 and the National Australia Bank (NAB) firmed by 1.3pct to $24.60. Shares in the ANZ (ANZ) gained 0.3pct to $21.26 and Macquarie Group (MQG) was firmer by 2.1pct to $29.10.

Mining stocks held up fairly strongly despite the weak reading on China's HSBC Manufacturing Purchasing Managers Index, which renewed concerns that growth in the world´s second largest economy may slow in the latter half of the year. The preliminary HSBC PMI for China fell to a 28-month low of 48.9 in July from a final reading of 50.1 in June. Shares in index leader BHP Billiton (BHP) rose 0.3pct to $43.58 while Rio Tinto (RIO) was off 0.3pct to $82.34.

Australia's largest gold producer Newcrest Mining (NCM) today reported a 16pct rise in 4Q production. Copper production for the three months to June was up slightly. The jump in annual production reflected the company´s takeover of Lihir Gold last year, and higher production at operations in New South Wales, Indonesia and Papua New Guinea. The price of gold edged higher in Asian trade, with the spot gold price up US$1.10 to US$1601.60 an ounce. However despite a positive start to the session, NCM shares ended down 0.5pct to $40.60.

Santos (STO) released 2Q oil and natural gas production numbers today, which were in line with expectations. STO shares fell 0.3pct to $13.31, while the energy sector as a whole gained 0.2pct.

Retail stocks came under pressure, with Harvey Norman (HVN) off 0.8pct to $2.35 and Myer Limited (MYR) weaker by 1.6pct to $2.40.

Shares in NewsCorp rose 1.6pct to $15.48 and have now gained 9.2pct since Monday's two year low of $14.17.

The Australian dollar ended the day's trade at US107.42c, £0.6634 and €75.19c.

On the market overall, a total of 2.2 billion shares were traded, worth $4.7 billion. 580 were up, 472 were down and 376 were unchanged.

At 4.30pm AEST on the ASX24, the futures contract was at 4534, up 9pts.

Ahead tonight, Eurozone members meet to discuss a second bail-out package for Greece.

In the US - the Philadelphia Fed Index, home prices, the leading index and weekly jobless claims data are released. Morgan Stanley, Ford and Microsoft release earnings.

(From Juliette Saly, CommSec Market Analyst)