Australian Stock Market Report – Afternoon 10/1/13

AFTERNOON REPORT
(5pm AEST)

The Australian share market has closed modestly lower on what was a very busy day for investors around the globe.

Late this afternoon, US lawmakers failed to agree on budget talks, meaning the US government has gone into a partial shutdown of non-essential services for the first time in 17 years.

Locally, the Reserve Bank of Australia left the official cash rate on hold today at 2.5 per cent as expected. In a major change of emphasis, the Reserve Bank did not refer to the Aussie dollar as being at "a high level". It also removed the line that "It is possible that the exchange rate will depreciate further over time."

Elsewhere, figures showed retail trade rose by 0.4 per cent in August, just above market forecasts. However consumer discretionary and consumer staple stocks were sold off today, with the discretionary sector closing down 0.3 per cent and shares in Wesfarmers (WES) down 0.6 per cent to $40.88.

The Performance of Manufacturing index rose by 5.3 points to a 2-year high of 51.7 in September. Any reading above 50 suggests manufacturing is expanding.

The RP Data - Rismark Home Value index of capital city home prices rose by 1.6 per cent in September to record highs. Home prices are up 5.5 per cent on a year ago. However prices rose in just three capital cities in September.

On the market overall, a total of 1.6 billion shares changed hands, worth $3.9 billion. 393 were up, 489 were down and 310 were unchanged.

At 5pm AEST the SFE 200 Futures Index was at 5209, down 14 points.

The government shutdown in the US has pushed the greenback lower, sending the Aussie dollar above US94c.

In the US tonight, the ISM manufacturing index is released with construction spending and auto sales.

[Kick off your trading day with our newsletter]