Australian Stock Market Report – Afternoon 1/13/14

EVENING REPORT
(5pm AEDT)

The local market worsened its position from lunch through to the close of trade, with the All Ords Index sliding by a little over 0.3 per cent. At its worst, the index was down 0.41 per cent and edged higher by 0.09 per cent at its best.

The Australian dollar deserves a mention, as it cracked through US90cents today after remaining below that key level for the best part of a month. The worse than expected U.S. jobs data out last Friday resulted in a weaker U.S. dollar, higher commodity prices and a firmer Aussie dollar.

Australia's biggest banks could not recover ground this afternoon, with the four majors all falling by at least 0.65 per cent. National Australia Bank (NAB) was the biggest loser, sliding by 0.95 per cent.

The miners failed to all benefit from higher commodity prices, with the country's second biggest miner, Rio Tinto (RIO) easing by 0.22 per cent while Fortescue Metals (FMG) gave back its early gain to slump by 1.15 per cent. Underperforming gold miner, Newcrest (NCM) surged by 6.1 per cent, following a 1.4 per cent rise in gold prices.

At the close, 1.4 billion shares were traded, worth $2.88 billion. 438 stocks finished higher, 509 in the red and 318 closed unchanged.

Looking ahead, this week is set to be quite eventful with most of the attention likely to be on U.S. data. The U.S earnings season will intensify with many of the world's largest banks set to deliver 4Q results. This will include JP Morgan Chase, Wells Fargo, Bank of America, Goldman Sachs, American Express, Citigroup and Morgan Stanley.

Locally, consumer sentiment on Wednesday and jobs on Thursday will be major Australian drivers. Consumers have been decidedly more optimistic in recent months. Anecdotal evidence that the retailers have had a robust Christmas sales period probably means that confidence is higher. The warmer weather and rising house prices are also a positive for sentiment. On Thursday, we'll receive an updated look at the Australian jobs market. We're expecting the creation of 11,000 jobs and a steady jobless rate at 5.8 per cent. Despite an uninspiring economy, the Australian jobs situation has remained relatively robust.

Despite ample economic releases in the U.S. and a number of key reports in Australia this week, data will be light on across Asia Pacific and Europe.

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