Australian Stock Market Report – Afternoon 10/15/13

Evening Report

(5:00 PM)

The main feature of the afternoon session in local trade was the resolve of the local index to remain at the highs of the day. This could easily be dismissed as being of little consequence. Although an argument could be made that the performance that given the performance of the market in recent weeks ( the ASX200 is at its best levels since the end of September ) it could be suggested that shorters or sellers could reasonably be rethinking their ways given the market's resilience.

At face value today's volumes were unremarkable, although considering the prevailing atmosphere , a gain of almost 1% for the index on just over $4bln of turnover could be describes as quite positive.

Rio Tinto (RIO) was one of the better improvers in the resource space following robust production numbers for the September quarter. RIO produced 53.3 million tonnes of iron ore from over the period. The price of iron ore has confounded many pessimists consolidating above $130.00 per tonne in the face of many estimates which had prices closer to $110.00 per tonne. RIO confirmed its expectations to reach full year production guidance of 265 million tonnes for the 2013 calendar year.

In its 1st quarterly trading update, Tabcorp (TAH) said revenue for the period rose by 3.1 per cent to $503.9 million, compared with $488.9 million for the same time last year. Wagering revenue was $385 million over the quarter, a 0.1 per cent rise compared with $384.6 million in the previous corresponding period. TAH shares ended unchanged

As we move into European trade a deal to avert a US default and closure of the Government seems to be in the offing in Washington. The deal is being negotiated in the Senate, but involves extending the funding of Government through to 15 January 20.

The sticking point will remain the House of Representatives. Although with the inclusion of Senate Republicans in the negotiation process, Speaker Boehner will find it hard to dismiss this deal without a vote. We strongly suspect enough house Republicans would join in with Democrats to pass the Senate's negotiated outcome should a vote occur 14 and the debt ceiling through to 7 February 2014.

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