Australian Stock Market Report - Afternoon 11/24/2011

MARKET CLOSE (4.30pm AEDT)

The Australian sharemarket lost ground for the fifth straight day today however did quite well to only fall modestly. The All Ordinaries index (XAO) eased by 0.3 pct or 10.5 pts to 4115.3. Shares were actually in positive territory for around two hours today only to give away those gains in the last hour and a half of trade.

Most sectors ended in the red with the miners once again the worst performers. The S&P/ASX 200 Materials index (a measure of how the miners did today) fell 0.27 pct or 29.2 pts to 10770.2. RIO Tinto (RIO) rose by 0.18 pct or 11 cents to $62.41 while the larger BHP Billiton (BHP) edged higher by 0.06 pct or 2 cents to $34.53.

The S&P/ASX 200 Financials index (a measure of the performance of financial institutions) rose 0.1 pct or 3.8 pts to 3792. Commonwealth Bank of Australia (CBA) was the only major to rise by 0.71 pct or 33 cents to $46.60 today, while National Australia Bank (NAB) dropped 0.58 pct or 13 cents to $22.24, ANZ Banking Group (ANZ) fell by 0.47 pct or 9 cents to $19.01 while Westpac (WBC) lost 0.4 pct or 8 cents to $19.75.

The retailers were amongst the worst today with upmarket department store owner, David Jones (DJS) disappointing with a less than impressive sales update. Between July and September sales fell by 11.2 pct which resulted in a 5.39 pct loss on the market today.

Surfwear retailer, Billabong (BBG) fell by 12.5 pct or 52 cents to $3.64 despite there being no official announcements out from the company.

Australia's largest supermarket owner and biggest owner of poker machines, Woolworths (WOW) lost 0.86 pct or 21 cents to $24.56 today as it held its annual meeting with shareholders. The company also unsurprisingly joined the fight against pokie reform. Believe it or not, last year on average Australians lost around $1200 each from gambling which was twice as much as the Canadians and the Irish.

In Asia today, China lowered its reserve ratio for 20 of its banks. The idea would be to allow the banks to lend a little more out to investors since the Chinese economy is showing signs of slowing. Banks now have to park around 16 pct of their deposits with the Chinese Central Bank. Yesterday a report showed that the Chinese manufacturing sector showed more weakness than expected.

Malaysian budget airline Air Asia which is also the largest low-fare airline in Asia has struggled over the past few days and hit a one month low yesterday after it posted a third quarter loss due to higher fuel prices.

Tonight in the U.K, the latest growth reading will be released for the third quarter (July to September) at around 8.30pm. This is around 1.5 hours into British trade.

In Germany at approximately 8pm the latest report on business confidence will be released. The market is expecting confidence to come in at 105.5 (a reading above 100 indicates positive sentiment).

The volume of shares traded came in at 2.29 billion today, worth $5.66 billion. 330 shares were up, 649 finished weaker and 396 ended unchanged. Equity options expired today (there tends to be higher volume when this takes place).

At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24 futures contract is down 0.27 pct or 11 pts to 4037.

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.

The U.S sharemarkets will be closed tonight due to the Thanksgiving public holiday.

Turning to currencies, the Australian dollar (AUD) has continued to lose ground and buys US97.1 cents trading around a one and a half month low.

Steven Daghlian, Commsec Market Analyst

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