Australian Stock Market Report – Afternoon 11/16/2012

MARKET CLOSE
(4.30pm AEDT)

The Australian sharemarket slipped for the fourth time in five sessions today, with the All Ordinaries Index (XAO) easing by 0.2 per cent or 10.5 pts to 4360.1. The local market fell by 2.7 per cent this week, making it the biggest weekly slide in value since May. Interestingly, barely a month ago the Aussie market hit a 14-month high but has dropped in value by 5 per cent since.

Global markets continued to lose ground overnight, with shares in the U.S easing by 0.25 per cent, Germany's DAX fell by 0.82 per cent, France's CAC40 dropped by 0.52 per cent and Italian shares fell 0.59 per cent. Concerns over the U.S fiscal cliff, tensions in the Middle East and the Eurozone economy technically slipping back into recession put markets under pressure.

As has been the case over the past couple of weeks, the mining, energy and financial sectors all ended in the red which held the rest of the market back. BHP Billiton (BHP) fell 0.57 per cent or 19 cents to $32.93, while the smaller Rio Tinto (RIO) edged higher by a modest 0.14 per cent.

The four major banks all lost ground also, with ANZ Banking Group (ANZ) the biggest loser after slipping 1.62 per cent or 39 cents to $23.66. Westpac (WBC) fell by 0.89 per cent or 22 cents to $24.42, Commonwealth Bank (CBA) dropped 0.7 per cent and National Australia Bank (NAB) eased by 0.13 per cent or 3 cents to $23.20.

One of the standouts today however; was adventure retailer Kathmandu (KMD), which rose by 4.5 per cent; taking the gains for the year to a touch over 6 per cent. The retailer announced a 19.5 per cent improvement in sales for the 15 weeks to 11 November. Since the start of August and despite a difficult trading environment for retailers, KMD added six new stores across Australia. It is planning another three new stores to be in operation prior to Christmas.

No major economic news was issued today; however a number of reports were released in Australia over the week. There was a slight rise in lending to purchase homes; consumers are still shying away from using their credit cards; the Aussie business community is feeling a bit downbeat; wages only rose modestly between July and September; and a survey showed that consumers are a touch more confident with their finances now than a month ago.

Next week will be extremely quiet on the economic front, with the minutes from the November interest rate meeting the highlight on Tuesday.

In Europe tonight, the region's current account along with trade balances are due for release. In the U.S industrial production for October will be out while a Federal Reserve official will be delivering a talk.

Volume of shares traded came in at 1.77 billion today, worth just $3.88 billion. 438 shares were up, 483 were weaker and 380 ended unchanged.

At 4.30pm (AEDT) on the Sydney Futures Exchange, the ASX24 futures contract is up 0.05 per cent or 2 pts to 4350.

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

U.S futures are pointing to a slightly better start tonight. Due to the start of daylight savings in Australia and its end in the U.S, American markets will now be trading between 1.30am (AEDT) and 8am (AEDT).

Turning to currencies, the Australian dollar (AUD) has lost ground against a basket of currencies overnight. One AUD buys US103.4 cents, is trading at £65.1 pence and €81.14 cents.

Australia is a commodity based economy, with commodities in general accounting for almost 80 pct of all our exports over the past nine months. In essence, when the going gets tough globally, there is fear of less demand for our commodities, which tends to result in a weaker AUD.

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