Australian Stock Market Report – Afternoon 1/11/2013

AFTERNOON REPORT
(6pm AEDT)

Local stocks closed lower today, after Chinese inflation rose more than expected and as concerns about damage from Cyclone Narelle weighed on mining stocks. The All Ordinaries Index (XAO) ended the day's session down 11.4pts or 0.2pct to 4733.8pts, a fall of 0.2% over the week, following last week's 1.2pct gain.

The local market underperformed gains on Wall Street, after the S&P 500 Index hit fresh five year highs overnight.

Worries about the impact of Cyclone Narelle on the Pilbara Coast forced the closure of iron ore ports in the region. Rio Tinto (RIO) shut down key iron ore export terminals, while BHP Billiton (BHP) suspended work on offshore oilfields. RIO shared closed down 2pct to $65.80 while BHP was also off 2pct to $36.68.

Elsewhere financial stocks were mixed, with the sector closing flat. Shares in the Commonwealth Bank (CBA0 were off 0.4pct to $61.38 while the National Australia Bank (NAB) was firmer by 0.6pct to $25.57.

Defensive stocks finished the day's trade mostly higher. Woolworths (WOW) was up 0.6pct to $30.19 while Telstra (TLS) was steady at $4.48.

Online job advertiser Seek Limited (SEK) saw its share price rise by 5.4pct to $7.65 on plans to expand its presence in China. Seek is set to buy Zhaopin shares from Macquarie Group (MQG) and other shareholders for US$105 million to take its ownership level from 55.5pct to 72.3pct. "China will become the biggest online employment marketplace in the world in the not so distant future," said managing director Jason Lenga of the move.

Toll road operator Transurban Group (TCL) lifted toll revenue in the first half of 2012/13 despite only modest traffic increases. Toll revenue for the three months to December 31 2012 came in at $202.6 million, up 4.9pct from the prior corresponding period. Higher tolls boosted revenue, with traffic gains below revenue gains in percentage terms. Sydney's M2 and M5 motorways posted slight falls in traffic and revenue.

China's annual inflation rate rose from 2pct to a seven-month high of 2.5pct in December, above forecasts for a result near 2.3pct. Over the month inflation rose by 0.8pct (forecast +0.5pct) driven by a sharp 2.4pct lift in food prices. Non-food prices were flat in the month.

Chinese producer prices fell by 0.1pct in December after a similar fall in November. Producer prices are 1.9pct lower than a year ago (forecast, 1.8pct decline).

Yesterday, data showed that China's trade surplus lifted from US$19.6 billion to US$31.6 billion in December. The result was well above forecasts for a surplus near US$19.7 billion. Exports rose by 14.1 per cent in the year to December (fastest rate in seven months) while imports were up 6.0 per cent (fastest rate in six months). Both results were well above market forecasts.

The Australian dollar ended the day's session at US105.7c, £0.6546 and €79.75c.

On the market overall, a total of 1.5 billion shares were traded, worth $3.6 billion. 492 were up, 402 were down and 373 were unchanged.

At 6pm AEDT the SFE 200 Futures was at 4685, up 4pts.

Ahead tonight, monthly trade and budget figures are released in the US. Wells Fargo releases earnings results.

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