Australian Stock Market Report - Afternoon 12/13/2011

MARKET CLOSE (4.30pm AEDT)

The Australian sharemarket could not stage a comeback this afternoon with all eyes remaining on Europe for any potential leads. The All Ordinaries index (XAO) fell 1.4 pct or 59.7 pts to 4251.7. This the third time in five days that the local sharemarket has lost ground.

The S&P/ASX 200 Materials index (a measure of mining stock performance) fell 1.92 pct or 216.2 pts to 11032.3. Australia's largest listed company, BHP Billiton (BHP) slumped by 1.94 pct or 71 cents to $35.82 while RIO Tinto (RIO) plummeted by 2.14 pct or $1.37 to $62.76.

The S&P/ASX 200 Energy index (a measure of stock performance in the energy/oil and gas sector) was the biggest loser of the day after dropping 2.14 pct or 292.8 pts to 13414.5. The country's second largest oil and gas producer, Woodside Petroleum (WPL) slumped by 2.59 pct or 84 cents to $31.53 while Santos (STO) fell 1.59 pct or 21 cents to $13.01.

The S&P/ASX 200 Financials index (a measure of stock performance in the financial sector) ended 1.36 pct or 55.1 pts lower to 4007.8. All four major banks lost significant ground with National Australia Bank (NAB) was down 2.5 pct or 61 cents to $23.75, Westpac (WBC) fell 2.16 pct or 46 cents to $20.83, ANZ Banking Group (ANZ) slumped by 1 pct or 21 cents to $20.74 and finally Commonwealth Bank of Australia (CBA) eased by 0.96 pct or 48 cents to $49.35.

The S&P/ASX 200 Consumer Staples index rose 0.27 pct or 20.2 pts to 7629.8 and was the lone sector to rise today. This was mainly thanks to a 1.04 pct or 27 cent improvement for Woolworths (WOW) shares to $26.22. WOW shares have fallen by 2.7 pct so far in 2011.

In Europe tonight, the latest report on confidence levels of German consumers will be out in addition to the U.K's latest Consumer Price Index (inflation).

No major economic data was scheduled for release in the Asian region today. Yesterday, a report was issued in Japan on the confidence levels of the Japanese consumer. The reading came in a little weaker than expected. This is a survey of around 5000 Japanese homes asking questions on employment, household income and overall livelihood.

In the U.S tonight, the latest monthly report on retail sales will be released and the U.S Federal Reserve (the American equivalent of Australia's Reserve Bank) will be holding a one day meeting to discuss monetary policy (the supply of money in the economy).

Last night, the Department of the Treasury released the monthly Federal Budget Balance. This records the difference in value between the federal government's income and expenses during the previous month. The deficit (expenses larger than income) was US$137.3 billion in October which was a little better than market expectations. If we take a step back however, this is an absolutely huge amount of money for any nation to be in the red by in just one month.

Over the past 12 months, the American government has recorded a deficit of around US$1.2 trillion and congress has been trying to take steps to cut the shortfall.

The biggest budget outlay (expense) for the U.S treasury is the Department of Health and Human Services, followed by Social Security expenses and then the Department of Defence-Military Programs. The U.S spends more on its military than the next 20 nations combined.

The volume of shares traded came in at 1.67 billion today, worth $4.2 billion. 307 shares were up, 643 finished weaker and 342 ended unchanged.

At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24 futures contract is up 0.07 pct or 3 pts to 4187.

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.

Dow Jones futures are currently weaker, indicating that U.S stocks could start lower tonight when American markets open at 1.30am (AEDT). Due to the Americans going back an hour on November 5, U.S markets will be trading between 1.30am (AEDT) and 8am (AEDT).

Turning to currencies, the Australian dollar (AUD) is weaker by US100.8 cents.

Steven Daghlian, CommSec Market Analyst

[Kick off your trading day with our newsletter]