Australian Stock Market Report – Afternoon 10/19/2012

AFTERNOON REPORT
(5pm AEDT)

Local stocks have closed at fresh 14 month highs again today, despite a shaky start on the back of falls on Wall Street. The NASDAQ closed down 1pct after Google shares plummeted on a profit downgrade. The All Ordinaries Index (XAO) hit an intra-day low of 4561.6pts, but managed to recover in late trade, finishing higher by 12.6pts or 0.3pct to 4593.5.

Financial stocks were the weakest link, with the National Australia Bank (NAB) delivering a profit warning due to weakness in its UK division. NAB has raised its bad debt provisions to $250 million, meaning there will be a negative impact on its full year fiscal result. For the September quarter, the NAB announced group earnings of $1.4 billion. NAB shares today fell 2.7pct to $26.22 while Westpac (WBC) was weaker by 1.5pct to $25.56 and the Commonwealth Bank (CBA) was off 0.4pct to $56.84. Shares in the ANZ Bank (ANZ) fell 1.1pct to $25.66 and Macquarie Group (MQG) was higher by 2pct to $31.31.

Mining players were much stronger, with BHP Billiton (BHP), Rio Tinto (RIO) and Fortescue Metals Group (FMG) all moving higher after reporting quarterly production numbers this week. BHP added 1.3pct to $35 while RIO was firmer by 0.7pct to $59.15 and FMG closed higher by 1.2pct to $4.23.

Telstra (TLS) shares continued to be well supported, firmer by 1.8pct to $4.07 while the retailers were generally weaker; David Jones (DJS) off 1.5pct to $2.61 and Harvey Norman (HVN) weaker by 2pct to $2.01.

The Ten Network (TEN) continued to plummet to record lows, after announcing a $12.9 million loss yesterday. TEN closed down 8.2pct to $0.28.

Shares in GrainCorp (GNC) were placed in a trading halt today at $8.85 after US grain trader Archer Daniels Midland purchased a 10pct stake in the company and announced its intentions to engage in discussions concerning a potentially bigger deal. GNC told the ASX that no formal takeover bid has been received, but that "should GrainCorp receive a proposal from ADM, the Board will review the proposal as well as other options to maximize value for GrainCorp shareholders." GrainCorp shares will remain in a trading halt until Tuesday.
A block of 22.8 million GrainCorp shares, or 10pct of the company, was traded early this morning at $11.75 a share, a 33pct premium to its last closing price.

The Australian dollar has had a solid week and finished the session's trade at US103.67c, €79.31c and £0.6455.

On the market overall, a total of 1.96 billion shares were traded, worth $5.5 billion. 528 were up, 414 were down and 368 were unchanged.

At 4.30pm AEDT the SFE 200 Futures was at 4566, up 16pts or 0.4pct.

Ahead tonight, existing home sales data is released in the US.

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