Australian Stock Market Report - Afternoon 1/24/2012

MARKET CLOSE
(4.30pm AEDT)

Despite the market trading in positive territory for much of the session, shares pulled back in late trade to end largely flat. The All Ordinaries index (XAO) only fell by 1.2 pts to 4286.4. The energy sector rose by around 0.5 pct while the financials edged higher by 0.2 pct.

Australia's largest miner and listed company, BHP Billiton (BHP) fell 0.43 pct or 16 cents to $37.08 while the second largest miner, RIO Tinto (RIO) rose 0.68 pct or 46 cents to $68.35. Gold miner Newcrest Mining (NCM) was one of the day's better performers after reaffirming its full year production expectations. NCM shares jumped 1.99 pct or 64 cents to $32.84.

Papua New Guinea based company, Oilsearch (OSH) rose 2.7 pct or 18 cents to $6.84 after releasing its fourth quarter results. OSH had a 10 pct rise in oil production last quarter however said that it expects steady production this year.

Activity in the market continued to remain light due in part to a number of public holidays in the Asian region. There are no shortage of summits, conferences, meetings and negotiations (in Greece) taking place across the globe which is effectively keeping investors both on edge and hesitant to overcommit to shares.

Three of the four major banks ended the day higher today with National Australia Bank (NAB) the worst performer after falling 0.55 pct or 13 cents to $23.72. Westpac (WBC) gained 0.59 pct or 12 cents to $20.58, ANZ Banking Group (ANZ) improved by 0.38 pct or 8 cents to $20.95 and Commonwealth Bank (CBA) edged higher by 0.12 pct or 6 cents to $49.80.

Qantas Airways (QAN) ended 1.27 pct or 2 cents higher to $1.59 today, adding to the 2.94 pct gains yesterday. Yesterday, an agreement was reached between QAN maintenance engineers and the airline on employment conditions and pay. Maintenance engineers will not be able to take industrial action against QAN until 2015.

In the Asian region today, Japan's central bank released its latest statement on monetary policy and also decided to keep interest rates unchanged for yet another month. Most markets in the region were closed today due to the Lunar New Year, including markets in China, Hong Kong, Malaysia, Singapore, South Korea, Taiwan and Vietnam.

Tomorrow, markets in China, Hong Kong, Taiwan and Vietnam will be closed for the Post-Lunar New Year celebrations.

No major economic data was released in Europe last night however the European Union (EU) is imposing a tough oil embargo on Iran. Europe is the second largest importer of Iranian oil behind only China and imports around 18 pct of Iran's oil exports. Iranian oil accounts for around 90 pct of Iran's total exports to the EU. Last night the U.S also imposed sanctions on Iran's third largest bank due to its supposed involvement with its alleged nuclear programs.

In Europe tonight, we will find out the state of the manufacturing industries in France and Germany while European finance ministers are meeting in Brussels to talk through their financial problems. The meetings are closed to the press but officials usually talk with reporters throughout the day.

In the U.S tonight, the U.S Federal Reserve (America's central bank) is kicking off its first meeting on interest rates and monetary policy of the year. A slightly more positive commentary is expected. On the earnings front, Apple, Johnson & Johnson, McDonalds and Yahoo! will all be posting their quarterly profit results overnight.

The volume of shares traded came in at just 1.64 billion today, worth $3.4 billion. 478 shares were up, 479 finished weaker and 385 ended unchanged.
At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24 futures contract is flat.

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 tonight.

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

Turning to currencies, the Australian dollar (AUD) buys US105 cents and €80.6 cents. The AUD is currently trading at £67.5 pence.

Steven Daghlian, CommSec Market Analyst

[Kick off your trading day with our newsletter]