Australian Stock Market Report – Afternoon 10/26/2012

AFTERNOON REPORT
(5pm AEDT)

Investors were faced with a variety of news over the last 5 trading days. A large number of companies have hosted investors at AGM's. The Mid week release of higher than expected QIII CPI numbers startled interest rate and equity markets, whilst the local currency ran higher. WA and NSW were put on negative credit watch by Standard and Poors. Historically such an outcome would have seen a substantial down draught for the currency. Regional stock indices seemed unimpressed by an improved read on Chinese manufacturing from HSBC. Completing the week will be the first glimpse at how the US economy performed in the third quarter.

Over the last week the ASX200 has lost a little more than 2.1%. The previous week saw the market rise 1.9%. In both cases there has been an improvement in investor participation with rising volumes. At face value it seems as though the market is accepting prices at the top end of its recent range.

In the final session of the week The All Ordinaries Index (XAO) finished the day's session down 37 points or 0.8% ending the week at 4496

Overnight, US stocks rose modestly although volumes were light ahead of US growth numbers being released tonight. European markets also had slight gains, with UK September quarter economic growth figures bouncing by one per cent, although these figures were distorted by the effects of the Olympics on the economy. Apple and Amazon earnings disappointed.

Spot iron ore closed above US$120 a metric tonne overnight, for the first time in four months. However that spike failed to boost iron ore players today. Fortescue Metals Group (FMG) closed down 2.4% to $4.05, while falls in the big mining players impacted on the overall bourse; with BHP Billiton (BHP) lower by 1.5% to $33.86 and Rio Tinto (RIO) off 1.8% to $56.45

The oil price is holding fairly steady around US$86 a barrel but energy players were sold off today. Shares in Woodside Petroleum (WPL) fell 1.5% to $34.30 while Santos (STO) was lower by 1.2% to $11.52

Macquarie Group (MQG) today released its first half earnings, with cash profit coming in at $361 million. Shareholders will receive an interim dividend of 75 cents per share, above expectations. The cash profit was lower than what the market was looking for but investors seemed happy to get into the stock for the dividend payment. MQG shares today rose 3.5% to $30.85

Coal miner Whitehaven Coal (WHC) resumed trade, after being halted at the request for more company information from majority shareholder Nathan Tinkler earlier this week. WHC shares dropped 4.7% to $3.05 on a profit downgrade, the company admitting weaker coal prices will hurt its bottom line and it doesn't see a rebound in the coal price anytime soon. WHC says earnings for 2013 could come in as low as $50 million, although it remains hopeful of more demand for coal from China early next year. WHC also says it's working on a CEO succession plan, with Tony Haggarty reportedly wishing to quit. No date has been set for his exit from the company, with WHC issuing a statement saying he remains in the job for now.

Toll Holdings (TOL) today announced it is hopeful of better FY13 earnings, although the mining slowdown will have some impact on its businesses exposed to the mining sector. TOL says this won't be material for the overall group; its share price rose 1 cent to $4.28

Myer Limited (MYR) shares rose 0.75% today to $1.98. A large parcel of shares in the department store were traded today worth $19.4 million. Meanwhile, the company's annual report showed that Myer boss Bernie Brookes received a 4.4pct pay rise last financial year (2011/12) while the retailer's profits fell. Mr Brookes´ contract with Myer will expire on August 31, 2014.

No local economic data was released today and the Australian dollar ended the day's trade at 103.10 US cents,
79.80 Euro cents and 64 British pence

On the market overall, a total of 2.18 billion shares were traded, worth $6.37 billion. 385 were up, 571 were down and 345 were unchanged.

At 5.30pm AEDT the SFE 200 Futures Index was at 4476, up 0.37%

Ahead tonight, September quarter economic growth numbers are released in the US.

Some of the local data releases next week include New home sales, Building approvals, Private sector credit, Home prices, Import & export prices, Producer prices.

The US will see the release of several market moving data points including Personal income and spending,Case-Shiller home prices,Consumer confidence, ADP employment,ISM manufacturing,Auto sales, US Non-farm payrolls.

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