Australian Stock Market Report – Afternoon 10/17/13

Afternoon Report
(16:30 AEDT)

At long last, the news we have all been waiting for. The United States House of Representatives has passed a bill that will see the re-opening of government and raise the US debt ceiling. The House voted 285-144 in favour of the legislation after the Senate earlier passed the bill 81-18. The agreement will see the US Federal Government reopen after being shut for the past 17 days and will remove the debt issuance restrictions. As government departments reopen tomorrow, we will get a clearer idea of if and when various suspended economic reports will be released (i.e. non-farm payrolls and retail sales)

The passage of the US legislation was met with a subdued response from regional indices. Markets edged higher rather than rallying strongly. Financials did the heavy lifting and miners gave back some of the ground they made yesterday. Volume was respectable at just under $4.3 billion

Fortescue Metals Group´s (FMG) quarterly iron ore shipments rose by four per cent compared to the previous quarter, which was marginally less than analysts had expected. 25.9 million tonnes of iron were shipped in the September quarter, ahead of the 25 million tonnes shipped in the June quarter. The average realised iron ore price for the period rose to $US121 a tonne in the period, up from $US113 in the preceding three months. Fortescue still expects shipments in the full year to be between 127 and 133 million tonnes.

Junior iron ore miner Atlas Iron (AGO) said it shipped 2.4 billion tonnes of iron ore in the September quarter, compared to 2.2 billion tonnes in the previous three-month period. The result represents a 50 per cent increase compared to the September quarter in 2012. AGO is on track to reach its 2014 full year guidance of 9.8 million to 10.3 million tonnes after reporting cash operating costs of $49 to $53 per tonne in the quarter. EBITDA was $91 million for the three-month period. AGO is upbeat about 2014, expecting improving demand and less discounting. AGO shares eased by almost 1%

The next key event for the markets will be the key Chinese data releases tomorrow local time (Q3 GDP, September industrial production and retail sales). These figures are expected to show the Chinese economy continues to consolidate.

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