Australian Stock Market Report – Afternoon 10/16/13

Afternoon Market Update
(17:30 AEDT)

One of the noteworthy developments of the last day has been the announcement by the Fitch ratings agency that it was placing the US's AAA sovereign rating on ´´rating watch negative´´, This suggests a greater chance a credit rating downgrade, in fact a 1 in 2 chance , compared to 1 in 3 chance implied by a "negative outlook".

Once again markets have held their nerve as the Midnight Thursday Washington time (3pm Friday Sydney )deadline offered by the US Treasury approaches (when it expects to exhaust its borrowing authority) leaving the US Federal Government with no more than US$30bn on hand. It will then depend on daily tax receipts and government payments, as to when the US government could potentially default on an obligation.

The ASX200 was able to reverse a 29 point deficit this morning. Volumes under the circumstance were reasonable. The positive impetus came from the big 3 miners, RIO, BHP and RIO. having maintained yesterday's positive momentum.

Brambles (BXB) rose almost 1 % following a positive trading update. Brambles said sales revenue for its pooling solutions operations rose thanks to its acquisition of container company Pallecon late in 2012. The pooling business which provides pallets and containers to businesses received $1.38 billion for the three months to the end of September, an increase of seven per cent on the same time last year. The group said the increase reflected new business and the contribution of Pallecon which Brambles acquired for $170 million in December. Brambles´ pooling solutions does not include the company´s Recall information management business, which it plans to demerge. Brambles said it remained on track to deliver an underlying profit of between $US930 million and $US985 million for the 2014 financial year.

At its AGM today, CSL confirmed the $950mn share buy-back foreshadowed in its full year results in August, the seventh for the company in eight years .The blood products group reaffirmed expectations for a 10% increase in underlying profit growth.

GOLD is holding steady after being knocked around by political headlines concerning the US debt deal. A pick up in safe haven buying has emerged of late out of China and India on fears over a potential US default

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