Australian Stock Market Report – Afternoon 12/5/13

EVENING REPORT
(5pm AEDT)

The Australian sharemarket gradually extended its losses from around midday onward, with the All Ordinaries Index (XAO) slumping by 1.3 per cent following a flat start. The mining sector was the only thing limiting the losses for most of the day; however faded late in trade.

The big banks were the main drag on trade, with Westpac (WBC) down 2.6 per cent and was the worst performer. National Australia Bank (NAB) fell by 2.1 per cent, ANZ slipped by 1.79 per cent and CBA fell by 1.69 per cent.

Qantas (QAN) improved from the lows of the day; however still slumped by 11.2 per cent. It is expected to record a substantial $300 million loss between July and December, to cut 1000 jobs and perhaps accept government assistance. Virgin Australia (VAH) recorded a loss in the most recent half; however has received funding from a number of foreign airlines/stakeholders.

On the economic front, exports to China hit a record $9.07 billion in October (up 59.2% over the year); however Australia's trade deficit of $529 million in October was disappointing.

At the close, 2.36 billion shares changed hands, worth $6.32 billion. 392 stocks finished higher, 537 in the red and 339 were unchanged.

Tonight will be busy in Europe, with both the Bank of England (the UK's central bank) and the European Central Bank (ECB) both meeting for monthly meetings. Interest rates are likely to remain at historic lows of 0.5 per cent in the UK and 0.25 per cent in the euro zone. The ECB's press conference will be held at 12.30am (AEDT).

In the U.S., the latest quarterly read on GDP (growth) will be issued for the three months from July to September. 2.8 per cent growth is forecast for the year. The weekly read on the number of Americans filing for jobless benefits last week will also be a highlight. Tomorrow night's non-farm payrolls (official government read on US employment) will be in focus on Friday night.

Tomorrow, Nine Entertainment makes its debut on the local market. According to an ASX circular, the company is expected to raise $631.4 million, will likely commence trading at 12pm (AEDT) tomorrow, had an issue price of $2.05/share and will trade under the ticker code of NEC.

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