Australian Stock Market Report - Afternoon 12/16/2011

MARKET CLOSE
(4.30pm AEDT)

The Australian sharemarket managed to remain a touch higher for the whole session and ended 0.5 pct or 21 pts stronger to 4218.8. Almost all sectors improved however weakness from the energy, consumer discretionary and I.T sectors held back the gains.

The S&P/ASX 200 Materials index (a measure of stock performance in the resource sector) rose 0.7 pct or 75.3 pts to 10841.9. RIO Tinto (RIO) gained 0.65 pct or 40 cents to $61.80 while the larger BHP Billiton (BHP) ended higher by 0.37 pct or 13 cents to $35.19. RIO is still trading near a two month low while BHP is close to its weakest level this month.

The S&P/ASX 200 Financials index (a measure of stock performance in the financial sector) ended 0.37 pct or 14.8 pts higher to 3986.9. Commonwealth Bank of Australia (CBA) was the best performing major bank today after rising 1.03 pct or 50 cents to $49.13, ANZ Banking Group (ANZ) rose 0.72 pct or 15 cents to $20.93 and Westpac (WBC) gained a touch. National Australia Bank (NAB) was the only major player to lose ground by 0.21 pct or 5 cents to $23.43. Three of the four major banks held their Annual General Meetings (AGM) this week.

Discount retailer JB Hi-Fi (JBH) fell 15.27 pct or $2.29 to $12.71 after telling the market that sales in the second quarter underperformed and also received a broker downgrade today.

It certainly has been an eventful 24 hours with no shortage of significant global events to focus on. Indonesia announced that it plans on close to halving Australian beef imports next year. Former French President Jacques Chirac was found guilty of corruption and given a suspended jail sentence. A number of the world's largest banks were downgraded by Fitch. This included Goldman Sachs, Barclays and Bank of America. Fitch is a French based ratings agency. The U.S also announced the end of its military mission in Iraq after almost nine years with more than 100,000 Iraqis expected to have perished.

As is the case almost every Friday, no major economic data was released in Australia today. Over the week however a number of reports were issued. Yesterday, we found out how many cars were sold across the country last month. The numbers made it clear that Australians are still remaining conservative with their savings. The number of new cars sold fell by 0.7 pct however Sports Utility Vehicles (SUVs) are becoming increasingly popular. Over the past 12 months there have been over 240,000 SUVs sold, which is the highest reading in records going back 17 years.

Next week will be the final full trading week remaining this year however volume/activity will likely remain light. The economic calendar is scheduled to be quiet with the latest report on population growth and the Reserve Bank of Australia's (RBA) board minutes the main highlights.

There was no major economic data out throughout Asia today. No reports are expected to be issued tonight in Europe. In the U.S however the latest inflation report will be out and is not expected to be a concern for markets at this point in time.

The volume of shares traded came in at 1.9 billion today, worth $4.3 billion. 485 shares were up, 447 finished weaker and 380 ended unchanged.

At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24 futures contract is up 0.53 pct or 22 pts to 4138.

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 stronger start to trade.

Dow Jones futures are currently higher, indicating that U.S stocks could start a touch higher 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 higher and buys US99.7. This time last week the AUD was trading at around US102 cents.

Steven Daghlian, CommSec Market Analyst

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