Australian Stock Market Report – Afternoon 1/8/2013

AFTERNOON REPORT
(5pm AEDT)

Local stocks pulled back today, ahead of the start of the US earnings season and as investors looked towards the next crucial stumbling blocks for the global economy. Despite gaining in the early session, the All Ordinaries Index (XAO) finished the day's trade at 4712.3pts, down 25.8pts or 0.5pct.

A firmer Yen weighed on Japanese stocks which saw weakness across the Asian region, while investors are also likely to remain cautious leading up to the 28th February deadline for US debt ceiling negotiations. Later this week, the European Central Bank holds its monthly policy meeting with speculation the ECB could lower its already low refi rate from 0.75pct in an effort to stimulate the global economy further. On Thursday, China will release monthly trade data, followed by inflation data on Friday while headline growth data for the fourth quarter will be released on Sunday.

Banking stocks were among the biggest losers with shares in the Commonwealth Bank (CBA) falling 2pct to $61.37 after hitting record highs yesterday.

Among the miners; BHP Billiton (BHP) eased by 0.8pct to $37.50 while Rio Tinto (RIO) was off 1.2pct to $66.60. Iron ore miner Fortescue Metals Group (FMG) closed down 3pct to $4.74, despite refuting a media report claiming abnormal delays to its shipments. Last week FMG said iron-ore production was at a record 100 million metric tons on an annualized basis in December, exceeding its own target of 95 million tons by the end of the year.

Retailer players looked strong today, with shares in Kathmandu (KMD) firmer by 2.5pct to $1.62 and JB Hi-Fi (JBH) up 2.8pct to $10.54. Harvey Norman (HVN) firmed by 1.8pct to $1.95.

Whitehaven Coal (WHC) fell another one cent today to close at $3.49, as the corporate regulator ASIC announced it would launch an investigation into the hoax which saw WHC plunge temporarily yesterday. An anti-coal activist sent a letter to the ASX purporting to be the ANZ Bank (ANZ), claiming the lender had withdrawn its $1.2 billion loan facility which is to be used in WHC's Maules Creek development.

In economic news today, Australia recorded a trade deficit of $2,637 million in November, the biggest deficit in 56 months (since April 2008). Imports rose by 1.8pct, outpacing a 1.2pct lift in exports.

The deficit on services stood at $1,190 million in November (just $41 million short of the September record), while the goods deficit stood at $1,447 million.

The Australian dollar ended the day's trade weaker against the major currencies; buying US104.79c, £0.6505 and €79.84c.

On the market overall, a total of 1.43 billion shares were traded, worth $4.5 billion. 386 were up, 527 were down and 359 were unchanged.

At 4.30pm AEDT the SFE 200 Futures was at 4665, down 27pts.

Ahead tonight, consumer credit and weekly chain store sales data are released in the US. Earnings season kicks off with Alcoa reporting after the bell.

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