Australian Stock Market Report – Afternoon 12/6/13

EVENING REPORT
(5pm AEDT)

The All Ordinaries Index (XAO) slipped by 0.2 per cent today, taking the losses this week to a significant 2.3 per cent. This makes it the worst week for local stocks in six months. Shares have fallen for five of the past six trading sessions. Volume was quite light however due to the all-important non-farm payrolls report in the U.S. tonight. This is a measure of how many jobs were added or lost in November and has the potential to set the tone for local shares and currencies next week. If much more than 200,000 jobs were created last month, the speculation will mount for an early taper.

The energy sector, consumer staples and IT stocks edged higher today, while all others finished in the red. Westpac (WBC) rose modestly while the remaining big three banks fell by at least 0.5 per cent.

Qantas (QAN) added to yesterday's slump, falling by 3.8 per cent (down 11.2 per cent on Thursday). Australia's largest airline was downgraded by ratings agency, S&P to BB+. Yesterday, QAN flagged a $300 million loss for the six months to December and announced plans to cut costs by $2 billion over three years. It is currently reviewing its capital expenditure and structure due to market conditions and will provide an update to the market in February 2014.

Nine Entertainment (NEC) made its debut on the Australian sharemarket today, and slumped by 3.4 percent, ending 7c below its issue price. Around $631 million was raised from the offer, making it the biggest listing of 2013.

Dick Smith (DSH) ended flat today; however ended around 1.5 per cent higher from the time of listing/floating on Wednesday.

Insurance company, QBE was in a trading halt today while it finalises a review of its U.S. division. QBE shares have jumped by 41 per cent since January.

Next week, a monthly jobs report in Australia will be the highlight. The market is expecting the creation of around 5,000 jobs and an unemployment rate around 5.7/5.8 per cent. In recent months it's been clear that businesses have been working existing staff harder rather than taking on full-time staff.

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