Australian Stock Market Report – Afternoon 10/24/13

EVENING REPORT
(5pm AEDT)

The Australian sharemarket benefited from a better than expected reading on Chinese manufacturing sector activity, only to give back part of the gains late in the session. The All Ordinaries Index (XAO) finished 0.3 per cent or 16.9pts higher.

At 12.45pm (AEDT), the HSBC Flash Manufacturing PMI rose from 50.2 to 50.9 (better than consensus of around 50.4). Despite the reading being at a seven-month high, continued improvements will need to be seen before taking the rise seriously. Last month, flash PMI fell short of forecasts. The number is reached by conducting a survey of around 430 purchasing managers in China. Of the past 11 readings, 8 have been above 50.0 (indicating modest industry expansion). The mining sector rose following the reading.

Commonwealth Bank (CBA) continued to rise in the afternoon, with Australia's biggest company ending 1.3 per cent higher. ANZ Banking Group (ANZ) rose by 1.25 per cent, Westpac (WBC) gained by 0.9 per cent and National Australia Bank (NAB) ended 0.34 per cent firmer.

Wesfarmers (WES), the owner of Coles, Bunnings, Officeworks, Kmart and Target eased by just 0.2 per cent by the close after its first quarter sales were mixed. Sales at its Bunnings, Officeworks and Kmart stores were on the improve while Target remains in a spot of bother with too much inventory impacting results.

Integrated logistics provider, Toll Holdings (TOL) ended 2.79 per cent firmer following its AGM today. TOL said it expects underlying earnings this financial year to improve on 2012. Productivity and cost reductions were flagged as two drivers.

Looking ahead, in Europe tonight, the latest Spanish unemployment report will be issued together with flash manufacturing PMIs in Europe. Spain's jobless rate is expected to fall from 26.3 per cent to 26.1 per cent. At 7pm (AEDT), the euro zone's manufacturing PMI is expected to be 51.4.

In the US, new home sales, flash manufacturing activity and weekly jobless claims will be issued. 43 companies will be issuing earnings, including Amazon, Ford, 3M and Microsoft (the biggest company to issue profit results in the US this week).

[Kick off your trading day with our newsletter]