Australian Stock Market Report - Afternoon 12/22/2011

AFTERNOON REPORT (4.30pm AEDT)

Local stocks once again ended in the red today, as investors remain cautious about buying equities in the lead up to the end of the calendar year and due to more uncertainty in the Eurozone. The All Ordinaries Index (XAO) closed down 48pts or 1.2pct to 4142.8 while the S&P/ASX 200 Index (XJO) fell 48.7pts or 1.2pct to 4090.8.

Retail stocks once again came under pressure as outdoor wear retailer Kathmandu (KMD) became the latest casualty of lacklustre Christmas sales. KMD issued a profit warning, telling the market sales in the past five weeks have been lower than the same period last year and below expectations. New Zealand stores have fared better than those here in Australia, with KMD shares down 25.5pct today to $1.23 while shares in Billabong (BBG) fell 8.7pct to $1.78. The surf-wear retailer issued a similar profit warning on Monday while electronics retail JB Hi-Fi which has also warned of a drop in 1H profits, fell a further 3.8pct today to $11.66. Department store Myer (MYR) dropped 6.2pct to $1.98.

Onesteel (OST) today announced it will write down $150 million in the value of its Litesteel Technologies business because of weak residential construction activity. However the company will also receive $100 million from the sale of a pipe systems business which means it should avoid having to go to shareholders to raise funds through a share placement. OST rose 10.3pct today to $0.75.

No economic data was released today and currency markets were fairly stable. At 4.30pm AEDT the Australian dollar was buying US100.81c, £0.6434 and €77.28c.

On the market overall, a total of 1.4 billion shares were traded, worth $3.3 billion. 345 were up, 588 were down and 376 were unchanged.

At 4.30pm AEDT on the ASX24, the futures contract was at 4082, down 29pts.

Ahead tonight, leading indicators index and the final estimate of US GDP for the September quarter are released in the US.

Juliette Saly, CommSec Analyst

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