Australian Stock Market Report – Afternoon 10/10/13

Afternoon Report
(16:30 AEST)

The key takeout from today's trade is that opportunistic buyers are not being bullied by the selling fraternity. In recent days the headlines from Washington have given sellers the edge although, they have only been prepared to chance their arm so far. The early session provide a good case study of this today.

The market lost ground on the open, the weakness stabilised as participants waited for the release of the labour force data. Thereafter sellers lost their nerve, although to be accurate, buyers weren't going crazy either. Under the circumstance the ASX200 is consolidating well at higher levels notwithstanding developments in the US. The only caveat in lauding today's resilience is the fact that volumes were on the lower side of things.

More significantly the data readings that we have seen lately continue to paint an encouraging picture. Whilst the figures aren't electrifying, they suggest that the economy is turning a corner. Today's employment data surprised with the drop in the unemployment rate, falling to 5.6% from 5.8%. Most had expected the rate to remain unchanged.

Another point to keep in mind is that these figures are still quite backward looking. The key in coming months will be to see if employment creation continues as employers anticipated a coalition victory at the recent election.

Bank of Queensland consolidated on its early gains in the 2nd half of the day. The Queensland lender reported cash profit of $248.2 million, compared to the $20.9 million recorded in the previous year which was marked by high loan impairment charges. The improved profit result driven by a reduction in bad debts reflecting improved credit management practices. A fully-franked interim dividend of 28 cents was announced, which brings its total dividend for the year to 58 cents, fully-franked. BOQ finished up by 6.8%

The current partial shut-down of the US government has delayed the release of important official US economic data; as a result a read on the US economy is not currently available. For now the focus remains on the political developments in Washington. According to recent newswire reports, Congressional aides to both parties have said House Republican and Senate Democratic leaders are open to a short-term increase in the debt ceiling.

[Kick off your trading day with our newsletter]