Australian Stock Market Report – Afternoon 10/4/13

Afternoon Report
(17:00 AEST)

The impasse over US budget talks continues in the U.S. Democrats and Republicans appear no closer to a budget deal on the third day of the federal government shutdown. Up to 800,000 federal workers have been sent home without pay. As a result the Aussie dollar traded at its highest level in a week on Friday on the back of a weakening US dollar.

International Monetary Fund chief Christine Lagarde has warned that a failure to raise the debt ceiling could ´´very seriously damage´´ the global economy. At the same time a US Treasury report discussed a failure to raise the debt ceiling could potentially lead to a default with a ´´catastrophic effect´´ on financial markets and economic growth.

Every sector lost ground in local trade on Friday. Miners were amongst the biggest losers. Commodity prices have been under pressure in the last day with market closures in China for the Golden Week holidays has mean market volumes have been very light.

Fish farmer Clean Seas (CSS) Tuna plans a sell up to $6 million shares in a capital raising to fund the increased production of yellowtail kingfish. The group will sell the shares at a 20 per cent discount to the volume weighted average price for the five trading days prior to and including the offer´s closing date. The new shares will have a maximum price of 3.2 cents per share. CSS shares ended lower by 42%

Agribusiness Elders (ELD) has announced that a discrepancy in the valuation of cattle in its live export division will cost about $18 million. Elders said the negative impact of the discrepancy on the company´s underlying net profit for the full year is likely to be around the same amount. The group said it does not expect the issue to be of a recurring nature. Elders are continuing to investigate the discrepancy, after notifying the market of the matter on October 1. The investigation is seeking to examine causes and establish if there has been wrongdoing by any employee. Elders ended 0.5 cents lower at 10.5 cents

There is little else of note on the calendar today in the northern hemisphere. US Non-Farm payroll data will not be released tonight because of the shutdown.

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