Australian Stock Market Report – Afternoon 12/31/2012

Market Close Report - Year end at 2pm (AEDT)

The Australian share market started the day in the red just off 18-month highs. Global market ended lower on Friday night as many European exchange worked through the last day of trading for the year. In the US the DOW JONES eased by 158 points and the NASDAQ also closed lower as the stalemate continued over US budget talks. Rumours that President Obama had no fresh proposals to advance to Congressional leaders for weekend Budget talks hit our market in early trade as investors sold out of mining and banking stocks before the end of the year.

By the end of a shortened of a trading day The All Ordinaries Index (XAO) closed off 20.7 points or 0.44% to 4,664.6 points.

For the 2012 year the ASX 200 gained over 590 point or 14.6%.

The only real market moving factor today was the latest release of the HSBC manufacturing report out of China. The Chinese December PMI report showed a bigger than expected lift in manufacturing ion December up to 51.5 from 50.5 in November an above the read of 50.9 that the market was expecting. This result was good news for our markets it helped reduce the losses in the mining and energy sector mid-session but by the close with profit taking the market closed back at its early lower levels.
By the close the S&P/ASX 200 Materials index reduced early losses but still ended down 0.7% following fall on the base metal markets (The London Metals Exchange) on Friday. BHP Billiton Limited (BHP) fell by $0.30c to $37.10 and Rio Tinto (RIO) gave back 1.65% to $66.01. Smaller iron ore miner Fortescue Metals (FMG) closed $0.01c higher at$4.65.

Sundance Resources Limited (SDL) shares have opened 15% higher, on talk that the prolonged takeover deal from Hanlong Group, is set to be completed by March 2013. By the close of trade today SDL was up 15.6% to $0.37cents.

All eyes on the Media sector again today, after confirmation that John Singleton and investment managers Mark Carnegie´s company (Gutenburg Investments) has brought a minor stake (0.015%) in Fairfax Media Limited (FXJ). Today Fairfax shares opened 5% higher and by the close price held a 7.3% gain. Rivals in the Media space; News Corporation lost 0.57% to $24.50 while Ten Network Holdings Limited (TEN) listed a 3.3% slide to $0.29.

The big four banks were mixed by the close after starting in the red. Westpac (WBC) the weakest of the majors after falling by 0.85% to $26.04. Commonwealth Bank of Australia's (CBA) share price closed higher just off its record high (posted last week at $62.58) at $62.18.

Retail stocks gave back recent ground Boxing Day sales, discount retailer JB Hi-Fi (JBH) unchanged at 10.35 while Harvey Norman (HVN) lost over 1.3% to $1.90. David Jones (DJS) down 2.8pct to $2.36. Our big name retailers also gave back some ground Woolworths Limited (WOW) off 0.4% and Wesfarmers Limited (WES) off 0.11%.

Australia's biggest telecommunications company, Telstra (TLS) slipped back by 0.46% to $4.37.

No major data was issued in Australia today, however Private sector credit (lending) was unchanged in November after rising by just 0.1% in October. It was the weakest back-to-back gain in lending in three years. Showing annual credit growth eased from 3.8 to 3.5% but the annualised pace in the past six months was just 2.4%. Housing credit numbers were also weak showing the weakest growth of housing credit on record. Owner-occupier housing credit grew by 4.2% over the past year - the weakest growth in records dating back to 1976. And today's Petrol price data showed prices at the petrol pump are set to rise. As the wholesale (terminal gate) petrol price has lifted almost 3 cents a litre over the past eight days.

The Aussie dollar climbed mid-session before falling back at the close. At 2.30pm AEDT the Aussie dollar is buying US104.01c and €78.70c.

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