Australian Stock Market Report – Afternoon 2/27/14

EVENING REPORT
(5pm AEDT)

The Australian share market has fallen victim to profit taking, after a recent bull run. The All Ordinaries Index (XAO) lost 26pts or 0.5 per cent on the close to 5421 with weakness from mining, energy and financial players.

The industrials sector was the worst performing, down 1.4 per cent, after Australia's largest airline Qantas (QAN) posted a $252 million first half loss. The loss was not as bad as expected, yet the airline announced job cuts of 5000, at the upper end of market expectations. No guidance was given nor did QAN announce an interim dividend. The airline has not paid a dividend since March 2009. QAN shares fell more than 9 per cent to $1.155 today, back to levels last seen in mid-February. The share price has had a decent run-up of late, and is firmer by 5.5 per cent over the calendar year so far.

Elsewhere, engineering and maintenance contractor Transfield Services (TSE) posted a small $4.6 million 1H profit, swinging back to the black after a $246.7 million loss this time last year. TSE forecast FY profit between $65-70 million as it sees growth in its oil and gas revenue. The company won't pay an interim dividend. TSE shares fell 11.9 per cent to 85c today.

Nine Entertainment Co (NEC) posted a 1H net profit of $31.7 million compared to a $94 million loss this time last year. Revenue increased 22 per cent to $802 million. NEC reaffirmed its FY guidance and its share price rose 0.4 per cent to $2.29.

The world's largest job outsourcing company Freelancer Limited (FLN) posted a $753,000 FY net profit, 57 per cent higher than its own forecasts but only a 3.4 per cent increase on the last year's profit. FLN shares fell 5.4 per cent today to $1.40 although they have tripled since listing.

For more company results please head here: research.commsec.com.au/reportingseason

In other news Optus boss Kevin Russell announced he will step down next month. Parent company Singtel (SGT) shares were slightly higher at $3.21.

In economic news, new business investment in buildings or equipment fell by 5.2 per cent in the December quarter - the first fall in three quarters. Real investment in 2013 was $157 billion, down 3.7 per cent on the previous year.

Two billion shares changed hands today with a value of $4.8 billion. 390 were up, 555 were down and 363 were unchanged.

Ahead tonight, weekly data on US unemployment benefit claims is released together with durable goods orders.

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