Australian Stock Market Report - Afternoon 11/03/2011

MARKET CLOSE (4.30pm AEDT)

The Australian sharemarket lost ground today for the fourth consecutive day, with the All Ordinaries index (XAO) down 0.3 pct or 13.8 pts to 4237.5. Almost all sectors lost ground, with the financials and energy stocks the biggest drag on trade.

The S&P/ASX 200 Financials index fell 0.59 pct or 23.7 pts to 3986.9. ANZ Banking Group (ANZ) posted a full year profit result of $5.36 billion. Yesterday, Westpac (WBC) announced that its earnings for the year came to $6.3 billion. ANZ fell 1.96 pct or 41 cents to $20.49, National Australia Bank (NAB) fell 0.96 pct or 24 cents to $24.67, Commonwealth Bank of Australia (CBA) lost 0.44 pct or 21 cents to $48.01 and Westpac ended largely flat.

The miners ended mixed today, with BHP Billiton (BHP) down 0.03 pct or 1 cent to $36.54 while RIO Tinto (RIO) gained 0.08 pct or 5 cents to $66.45. Australia's largest miner Newcrest Mining (NCM) gained 0.36 pct or 12 cents to $33.77.

On the economic front today, a report showed that Australians have been opening their wallets a touch more with a 0.4 pct rise in spending taking place in September. Conservative consumers have been one major concerns of the Australian economy.

Commsec Economist, Savanth Sebastian said that "...there certainly seem like glimmers of sunshine in the latest round of retail data. Retail sales lifted for the third consecutive month, with a cumulative gain of 1.8 per cent. Now that may not sound like much but when you consider that it is the best three months of growth since November 2009 - it becomes a big deal. The result looks even better when you consider that the main strength for the past three months has been non-food retailing."

The fact that the Reserve Bank of Australia (RBA) cut interest rates on Tuesday for the first time in 31 months should also give the retailers a boost. It means that less money is being tied up in mortgage repayments and is leaving an extra $50 a month (on the average sized homeloan) in mortgage holder pockets.

When commenting on the Reserve Bank, Mr Sebastian said that "For the Reserve Bank it is the multiplier effect that essentially the Reserve Bank is banking on to spur domestic growth over the coming year. And the speculation of further interest rate cuts should ensure that businesses and consumers follow through on spending and investment plans over the coming year."

There is a lot to focus on over the next few days with all eyes remaining firmly fixed on Europe. Last night there likely were tears from the Greek Prime Minister after a meeting with the head of the International Monetary Fund and both the French and German leaders.

Leaders out of the European Union said that they would not give another cent to the Greeks until they decide whether to remain in the Eurozone or not via a referendum in around six weeks time.

Representatives from the world's 20 largest economies are meeting in Cannes, France for the G20 gathering tonight.

The European Central Bank (ECB) also convenes for its monthly meeting to discuss interest rates tonight. It will be Italy's Mario Draghi's first meeting as the new head of the ECB.

In the U.S tonight, there will be over 30 major companies releasing their full year profit results and the latest report on the number of unemployment claims made last week will be released overnight.

The volume of shares traded came in at 1.65 billion today, worth $4.27 billion. 389 shares were up, 555 finished weaker and 363 ended unchanged.

At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24 futures contract is up 0.31 pct or 13 pts to 4182.

Due to daylight savings, most major European markets are now trading between 7pm (AEDT) and 3.30am (AEDT). Futures in Europe are pointing to a weaker start to trade tonight.

Dow Jones futures are down 1.33 pct or 156 pts to 11612, indicating that U.S shares will likely kick off the session in negative territory when American markets open at 12.30pm (AEDT).

Turning to currencies, the Australian dollar (AUD) has lost some ground and buys US102.5 cents.

[Kick off your trading day with our newsletter]