Australian Stock Market Report – Afternoon 10/2/13

Afternoon Market Report
(17:00 AEDT)

The themes seen in early trade remained in place this afternoon. Volumes remained low as investors remained wary of US political developments.

The growing sense that the partial shutdown of the US Government could be a short lived matter has been helping market atmospherics in the last day. Another result that has calmed nerves somewhat has been commentary from S&P. The credit ratings agency announced that the debt ceiling debate is unlikely to result in a change in the US´ AA+ credit rating. S&P says ´´the current impasse over the continuing resolution and the debt ceiling creates an atmosphere of uncertainty that could affect confidence, investment, and hiring in the US. However, as long as it is short-lived, we do not anticipate the impasse to lead to a change in the sovereign rating.

Miners were generally weaker although one exception was uranium miner Paladin Energy (PDN). The group plans to cut more jobs, reduce executive pay and other spending in response to falls in the price of uranium. Corporate and exploration costs are to be reduced by 24 per cent in 2013/14 or $11.5 million. Discretionary capital expenditure will be cut by $13.2 million in the next two financial years. PDN shares ended higher by 10.4%

This morning figures from the ABS showed that building approvals fell more than expected in August. The data showed the number of buildings approved fell a seasonally adjusted 4.7 per cent to 13,687 during the month, compared to 14,304 approvals in July, seasonally adjusted. The weakening building approvals will be on the radar of the RBA. Although the multi dwelling series contributed most of the fall in approvals, a 1.6% reduction in stand alone house approvals is another example of how the handover from the mining to the non- mining part of the economy remains a work in progress.

Woodside Petroleum's (WPL) role in the multi-billion dollar Leviathan gas project in Israel faces hurdles according to reports pointing to the project exploring options that would see gas exported to Greek and Egyptian plants.

The Australian dollar is lower on the back of weaker than expected building approvals and trade data. The fall erased gains made after the RBA´s rate decision on Tuesday.

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