Australian Stock Market Report – Afternoon 1/9/2013

AFTERNOON REPORT
(5pm AEDT)

Local stocks rose today, reversing most of yesterday's losses, despite falls on Wall Street overnight and weaker than expected retail sales data. By close of trade, the All Ordinaries Index (XAO) rose by 17.8pts or 0.4pct to finish at 4730.1.

After the bell on Wall Street overnight, aluminium giant Alcoa reported earnings of six US cents per share. Revenue, which is what analysts more closely look for, came in at US$5.9 billion, ahead of expectations of US$5.6 billion. Alumina (AWC), listed on our market which owns a joint venture with Alcoa, saw its share price rise by 4.6pct to $1.025 in response to the better than expected result. Alumina's only earning asset is its 40pct stake in Alcoa World Alumina and Chemicals (AWAC), with Alcoa holding the controlling remaining 60pct.

US analysts are expecting an average 2.7pct lift in profits over the quarter.

Retail trade fell by 0.1pct in November after falling slightly (0.02pct) in October and rising by 0.4pct in September. Annual spending growth fell from 3.1pct to a seven month low of 2.9pct. Non-food retailing fell by 0.1pct in November after a 0.6pct fall in October and 0.3pct rise in September.

However, sales by chain-store retailers and other large retailers rose for the fourth straight month, lifting by 0.5pct in November. Sales by chain-store retailers and other large retailers were up 5pct on a year ago.

"What's going on the retail sector?" asked CommSec Chief Economist Craig James of the data. "It appears it's anyone's guess.... retail spending is either subdued or robust depending on which data you want to focus on."

Shares in outdoor wear retailer Kathmandu (KMD) today rose by 4pct to $1.685 while JB Hi-Fi (JBH) was up 0.9pct to $10.63. Consumer staples stocks also performed well. Woolworths (WOW) was up 1.5pct to $29.87 and Wesfarmers (WES) gained 0.2pct to $36.90. However the other big name discretionary retailers did not fare so well. David Jones (DJS) was down 0.4pct to $2.39 while Myer Limited (MYR) was off 2.7pct to $2.16. Shares in Harvey Norman (HVN) fell by 2.3pct to $1.905.

Iron ore prices continue to sky-rocket. Overnight the spot iron ore price increased by 2.9pct to US$158.50 a metric tonne. Fortescue Metals Group (FMG) shares closed steady at $4.74 while Rio Tinto (RIO) reversed some of its recent losses, adding 0.3pct to $66.81.

In other economic news released today, new home sales rose by 4.7pct in November after a 3.7pct gain in October. It was the strongest back-to-back lift in home sales in almost three years.

The number of job vacancies fell by 6.9pct in the three months to November after rising by 4.1pct in the three months to August.

CBA Infrastructure analysts Andre Fromyhr and Matt Crowe today released a new report indicating Sydney Airport could reach full capacity not long after 2025.

"At the point of constraint, Sydney will require new infrastructure in order to handle more volume growth (e.g. new runway, new terminal, or a second site)," the report said.

The CBA analysis found that Beijing appears to be the world's best practice for airport capacity utilisation, followed closely by London Heathrow.

The Australian dollar finished the day's session stronger today at US105.02c, £0.6545 and €80.3c.

On the market overall, a total of 1.6 billion shares were traded, worth $4.1 billion. 505 were up, 399 were down and 395 were unchanged.

At 4.30pm AEDT the SFE 200 Futures was at 4680, up 15pts.

Ahead tonight; US energy stockpiles, Canadian housing starts, UK trade, German industrial output and Italian 3Q public-sector finances are released. On Wall Street, Constellation Brands releases earnings results.

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