Australian Stock Market Report – Afternoon 10/14/2011

AFTERNOON REPORT (4.30pm AEDT)

A raft of soft data weighed on investor sentiment today, sending local stocks down by almost one percent. Weaker than expected Chinese trade data and disappointing earnings result from US heavyweight JP Morgan Chase sent global markets into the red overnight, while this morning ratings agency S&P downgraded Spain from AA to AA-. Another ratings agency, Fitch, downgraded UBS and seven more financial institutions.

The All Ordinaries Index (XAO) fell 37pts today or 0.9pct to 4269, however over the course of the week, the XAO was up 1pct.

Despite big losses in financial stocks offshore, our financial sector shed just 0.6pct today with Westpac (WBC) the worst out of the big four, down 0.6pct to $21.61.

Mining and energy stocks were the worst performers. Shares in index leader BHP Billiton (BHP) fell 2.1pct to $36.86 while Rio Tinto (RIO) was off 1.5pct to $68.30. Commodity prices dropped overnight as the weak Chinese export figures raised concerns about the slowing global economy.

Airline stocks have been in focus this week, due to ongoing strike action by Qantas (QAN) engineers, and after the ACCC approved a tie-up between Virgin Australia (VBA) and Singapore Airlines. QAN fell 0.3pct today to $1.56 but over the course of the week its share price gained 4.3pct. Virgin Australia rose 6.2pct today to $0.345 and was up 9.5pct.

Other economic data released today showed Chinese inflation rose 6.1pct on year in September, slower than the 6.2pct pace in August. Singapore´s economy grew at an annualized pace of 1.3pct in the third quarter from the second quarter, stronger than the 0.7pct growth expected.

The Australian dollar ended the day's trade at US102.09c, £0.647 and €74.07c.

On the market overall, a total of 1.4 billion shares were traded, worth $3.6 billion. 419 were up, 567 were down and 319 were unchanged.

At 5.30pm AEDT on the ASX24, the futures contract was at 4232, up 12pts.

Ahead tonight, Mattel reports earnings before the opening bell in the US. Retail sales, business inventories, and the University of Michigan confidence figures are expected.

Next week; local economic data is thin, but in the US we see readings on inflation, the housing sector and the overall economy, with the leading index for September released. Earnings season kicks up a notch with IBM, McDonalds and Apple all releasing earnings.

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