Australian Stock Market Report – Afternoon 12/11/2012

AFTERNOON REPORT
(5pm AEDT)

Local stocks continued to move in a positive direction today, boosted by positive offshore moves and firmer commodity prices. The All Ordinaries Index (XAO) gained 18.9pts or 0.4pct by close to finish at 4581.3pts, its best finish since mid-October. The ASX 200 closed at 4576pts, its highest close for 2012.

European share markets rose to fresh 18 months overnight, with the FTSE EuroFirst 300 Index up by 0.2pct. However Italy's share market fell by more than 2pct, with big falls coming through from financial stocks. US markets rose modestly with McDonald's up more than 1pct on strong sales.

Locally, financial stocks looked strong. Shares in Macquarie Group (MQG) firmed by 1.8pct to $33.68 while among the big four, the National Australia Bank (NAB) was firmer by 0.5pct to $24.70.

Mining stocks were a standout again. BHP Billiton (BHP) firmed by 1.3pct to $35.41 while Rio Tinto (RIO) was up 0.8pct to $61.77. Iron ore miner Fortescue Metals Group (FMG) continued to add to yesterday's gains, up 4pct to $4.21. Yesterday FMG agreed to sell half its stake in WA's Nullagine mine for $190 million.

Developer Lend Lease (LLC) shares rallied, after the company won a $1 billion deal to revamp Sydney's convention and entertainment centre precinct in a public private partnership with the New South Wales government. LLC will work with Infrastructure NSW to design and construct the precinct, with work expected to begin in December 2014. LLC is also behind the Barangaroo development on Sydney harbour. LLC shares finished at $9.03, up 2.2pct.

Southern Cross Media (SXL), the owner of the radio station at the centre of the Royal prank call, saw its share price rebound a little today. SXL shares fell almost 6pct yesterday on concerns about revenue after advertising was suspended indefinitely following the 2Day FM prank. Today SXL shares added 2.9pct to $1.07.

Among other media stocks; the Ten Network (TEN), which slumped after coming out of a capital raising induced trading halt yesterday, added 2pct to $0.25. Seven West Media (SWM) was firmer by 0.3pct to $1.58.

Economic data released today showed business confidence slumped in November. The NAB business confidence index fell from minus 0.9 points to a 3½ year low of minus 9.2 points in November. The business conditions fell from minus 4.9 points to a similar 3½ year low of minus 5.3 points. The survey of 600 businesses took place from November 19 to November 27.

However CommSec Chief Economist Craig James noted that another survey is more positive. The Roy Morgan business confidence rating showed a lift from 114.0 to 116.8 in November. The Roy Morgan survey covers 2,800 businesses as opposed to the 600 firms in the NAB survey.

"The latest gloomy business survey from NAB seemingly justifies the Reserve Bank decision to cut rates this month," said Mr James of the data. "But in terms of forward guidance the survey is of limited use.... The Roy Morgan business survey covers 2,800 firms, rather than just 600, and it showed a lift in business confidence in the latest month. But a problem for analysts is that few would have the $18,500 necessary to review the results of the Roy Morgan survey over a 12-month period."

The Australian dollar ended the day's trade at US104.8c, £0.6517 and €80.9c.

On the market overall, a total of 1.3 billion shares were traded, worth $3.8 billion. 482 were up, 460 were down and 360 were unchanged.

At 4.30pm AEDT the SFE 200 Futures was at 4579, up 12pts.

Ahead tonight, weekly chain store sales data and wholesale sales figures are released in the US.

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