Australian Stock Market Report – Afternoon 10/15/2012

AFTERNOON REPORT
(5pm AEDT)

The Australian share market closed flat today, with a battle between the banks - which were higher, and the miners, which were lower, playing out. Volume was very low, in fact it was the slowest trading day since the 3rd January when many people were still on Summer holidays. The All Ordinaries Index (XAO) closed down 4.6pts or 0.1pct to 4505.5.

The financial sector outperformed the market, despite banks weighing on US sentiment on Friday. The National Australia Bank (NAB) was the best out of the big four, up 0.5pct to $26.34 while the ANZ Bank (ANZ) was up 0.4pct to $25.77.

Lower commodity prices took their toll on the materials and energy sectors. At 5pm AEDT the oil contract was worth just over US$91 a barrel, with energy players down 0.4pct. Shares in Rio Tinto (RIO) closed down 1pct to $55.82 while Fortescue Metals Group (FMG) was off 3.4pct to $3.72.

Surf-wear retailer Billabong (BBG) continued to plummet to new all-time lows, after private equity firm TPG walked away from its revised $695 million takeover offer on Friday. BBG was today down 6.6pct to $0.78, and its share price has fallen 72pct over the last 12 months.

Elsewhere, platinum group metals producer Aquarius Platinum (AQP), plummeted 6.5pct to $0.58 on reports its Zimbabwean joint venture has paid $125 million in royalties to the government this year.

Shares in casino operator Echo Entertainment (EGP) also fell, following a report the company is seeking two non-executive directors to bolster the board as James Packer eyes the company's prize asset, Sydney's Star Casino. EGP closed down 0.8pct to $3.98.

Shares in the Ten Network (TEN) closed down 5.4pct to $0.35. TEN says negotiations are continue to sell its outdoor advertising business Eye Corp, amid reports the buyer has concerns about the business's financial performance.

In economic news today; the number of new owner-occupier housing loans rose by 1.8pct in August, marking the best growth in nine months. The value of all home lending rose by 0.6pct with owner-occupier loans up by 1.3pct and investment loans down by 0.8pct.

Fixed rate loans accounted for 11.2pct of all loans in August, with the average home loan across Australia at $300,400, down 1.6pct on a year ago.

According to the Australian Institute of Petroleum, the national average retail petrol price rose by 0.8 cents to 146.5 cents a litre in the past week. CommSec tips prices to rise by 2-3
cents a litre over the coming fortnight.

New car sales rose by 4.7pct in September in seasonally adjusted terms after rising by 4.3pct in August. Sales of sports utility vehicles hit record highs in the 12 months to September.

Of the data, CommSec Economist Savanth Sebastian said "Overall the Reserve Bank is unlikely to alter its view when it comes to interest rates. A low inflation environment and downside risks to the global economy will keep the door firmly open for further rate cuts. Any improvement on the housing front would be encouraging given it has big multiplier effects across the economy. However a further lift in house prices may result in the Reserve Bank pausing in the current rate cutting profile."

CommSec is still pencilling in a rate cut for November.

The Australian dollar ended the day's session at US102.19c, €79.23c and £0.6377.

On the market overall, a total of 1.7 billion shares were traded, worth $2.92 billion. 441 were up, 505 were down and 339 were unchanged.

Ahead tonight, the Empire State survey and retail sales numbers are released in the US.

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