Australian Stock Market Report – Afternoon 1/7/14

EVENING REPORT
(5pm AEDT)

The Australian sharemarket failed to hold onto gains of as much as 0.35 per cent today, only to fade in the final hour of trade. The All Ordinaries Index (XAO) lost 0.2 per cent, slipping for the third day, with the mining sector bearing the brunt of the selling.

Investors and traders are still somewhat in holiday mode however; with around $3.5 million worth of shares changing hands, which is still around $1 billion or so less than typically traded.

Iron ore miner Fortescue Metals (FMG) and Rio Tinto (RIO) were the two sharpest decliners amongst the ASX50 (the 50 biggest companies on the Australian market), with FMG slumping by 4.7 per cent and RIO by 2.5 per cent. Combined, RIO, BHP Billiton (BHP) and FMG wiped out 9.5pts from the All Ordinaries Index.

The banks contributed nothing in the way of gains, with only Commonwealth Bank (CBA) rising by just 0.15 per cent. ANZ Banking Group (ANZ) slipped by 0.4 per cent, while both National Bank (NAB) and Westpac (WBC) eased by 0.1 per cent.

Property trusts were the best performers, with a joint takeover bid for Commonwealth Property Office Fund (CPA) stimulating buying throughout the sector. Dexus property Group (DXS) and Canada Pension Plan Investment Board (which combined own around 40 per cent of CPA) made a joint bid. DXS rose by a solid 3 per cent and GPT Group (GPT) jumped by 2.5 per cent while CPA lost 0.4 per cent (CPA jumped 22 per cent in 2013).

The latest weekly petrol price data together with the monthly trade numbers were both issued. According to the Australian Institute of Petroleum, the national average price of unleaded petrol rose 6c/l to 158.7c/l. A falling Australian dollar together with elevated wholesale oil prices are keeping petrol expensive. CommSec expects a 2c/l lift at the pump over the next fortnight.

Australia recorded a smaller than expected $118 million trade deficit in November, making it the 23rd straight monthly deficit. Exports to China over the past year hit a record $92 billion and China accounts for 35.6 per cent of all Australian exports.

1.7 billion shares were traded worth $3.5 billion.

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