Australian Stock Market Report – Afternoon 12/21/2012

AFTERNOON REPORT
(4.30pm AEDT)

Fiscal cliff negotiations dominated investor sentiment today, sending local stocks off recent 18 month highs and into the red.

The Republican House Speaker John Boehner today said it's unlikely a deal to impose larger taxes ion Americans earning more than one million dollars per year would get enough votes. Now it's back to the drawing board with a deal unlikely before the Christmas break. The Dow Jones Futures slumped 190pts or 1.4pct sending local stocks down.

By close of trade, the All Ordinaries Index (XAO) was down 11.4pts or 0.3pct to 4635.2.

Before the dip on the market, shares in the Commonwealth Bank (CBA) reached an all-time high of $62.28, meaning the bank breached the $100 billion market capitalisation mark for the first time. That meant CBA had a bigger market cap than Wesfarmers (WES) $42B, Woolworths (WOW) $36B, IAG (IAG) $9.5B, Crown Limited (CWN) $4B, Qantas (QAN) $3.3B, Caltex (CTX) $2.5B, David Jones (DJS) and Myer (MYR) combined. CBA shares ended the day's session off their highs, firmer by 0.8pct to $62.

Mining players lost ground today, with profit takers moving in after a recent solid run. Shares in Fortescue Metals Group (FMG) closed down 2.7pct to $4.38 while index leader BHP Billiton (BHP) was lower by 1pct to $36.70.

The New York Stock Exchange could be sold to lntercontinental Exchange (ICE), a 12 year old exchange headquartered in Atlanta. ICE deals in investing contracts or future markets and the deal's tipped to be around US$8 billion. The potential deal is being seen as a positive for the local stock exchange here. The ASX (ASX) was forced to abandon an $8 billion merger with the Singapore Exchange last year after it was viewed it wasn't in the national interest. ASX shares today rose slightly, finishing at $31.21.

Surf-wear retailer Billabong (BBG) made a comeback, after several sessions of losses on a profit downgrade earlier this week and fears the company's fifth takeover offer for the year could be withdrawn. BBG shares rose 3pct today to $0.825.

No local economic data was released today and the Australian dollar finished at US104.53c, £0.6434 and €79.32c.

On the market overall, a total of 2.4 billion shares were traded, worth $8.3 billion. 412 were up, 545 were down and 352 were unchanged.

Ahead tonight, the University of Michigan confidence figures and personal income/spending data are released in the US.

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