Australian Stock Market Report – Afternoon 1/6/14

EVENING REPORT
(5pm AEDT)

The Australian sharemarket steadily worsened this afternoon, with the All Ordinaries (XAO) falling 0.5 per cent by close. Today was extremely quiet on the volume front however, with investors in holiday mode. There were around half as many shares traded as usual. The banks were minimising the losses at lunch; however the gains fell away with the rest of the market later in the session.

All sectors slipped into the red; with slumping commodity prices on Friday holding back both the miners and energy players. Australia's second biggest company and world's largest resource business, BHP Billiton (BHP) dropped by 0.56 per cent; wiping out 2.4pts from the All Ordinaries Index in the process. Iron ore miner, Fortescue Metals (FMG) was the worst performer; slumping by 1.89 per cent.

Mining services group, Forge Group (FGE) has continued to rise, with its shares edging 0.35 per cent higher, thanks to investment firm BlackRock snapping up a 5.3 per cent last week. FGE rose by 38 per cent last week.

At the close, 1.39bn shares changed hands, worth $2.38b. 423 stocks were higher, 468 fell and 342 closed flat.

Tonight in Europe, the latest reading on the health of the euro zone's services sector will be out at 8pm (AEDT). A reading of 51.2 is expected by the market (a number above 50.0 indicates industry expansion).

It should be an eventful evening for economic releases tonight in the U.S. with a monthly reading on factory orders and a senate vote amongst the highlights. At 2am (AEDT), the factory orders report will be issued; with a rise in orders often indicating a future rise in manufacturing activity. A 1.8 per cent rise over November 2013 is forecast by the market. At 9.30am (AEDT) tomorrow morning, the U.S. Senate will vote to either pass or reject the nomination of Janet Yellen as the head of the Federal Reserve (four year term starting in Feb and ending at the start of 2018).

Looking ahead to the rest of the week, the highlight globally will be the monthly non-farm payrolls report out of the U.S. this Friday. This is one of the more important pieces of economic data as it significantly influences the Federal Reserve's plans and the market's thinking in relation to stimulus tapering expectations.

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