Australian Stock Market Report – Afternoon 3/13/14

EVENING REPORT

The ASX 200 spent most day moving higher, although prices softened in the last 2 hours as investors focussed on Chinese economic figures due for release after the close of local trade. At its best levels of the session the market was up by 41 points; at the lows of the day the index was still in positive territory with a gain of 2 points. Volume was reasonable at around $4.5 billion.

The feature of the day was the stronger than expected employment report. Employment surged by 47.3K in February. Full-time jobs increased by 80.5K while part-time jobs fell by 33.3K over the month. There were upward revisions to historical jobs growth. The unemployment rate remained at 6.0% in February and the participation rate increased to 64.8%.

The markets were somewhat disbelieving of the rise in jobs growth over the last month. The impact on prices was modest. One view taken being that Average jobs growth over the past three months is around 14K which is below the monthly growth in the working age population, indicating a risk remains that the unemployment rate could continue to rise.

Consumer discretionary stocks were modestly higher as a group. The Reject Shop (TRS) announced the resignation of managing director Chris Bryce after more than four years in the role. Chris Bryce will leave the company at the end of June. TRS re-iterated it was on track to meet the full year profit guidance it provided in February. The group expects to make a net profit of between $17 million and $18 million in the 2013/14 financial year. TRS shares ended at $10.65 a gain of 36 cents or 3.5 per cent

Miners were the mainstay of the market after the pressure of recent sessions. Despite the gains for the session RIO remains down 2.7% for the week, BHP is down 3.5% and FMG has shed 5.3% over the last 4 sessions. Shares in rare earths miner Lynas (LYC) continued to ease after the steeper than expected loss announced earlier in the week. The stock closed at 24 cents, down 2 per cent.

The Aussie dollar rallied sharply following the strong read on local jobs this morning. However, Chinese data after market close, showed Industrial production rising by 8.6% in Feb, compared to expectations for a 9.5% rise. As result the local currency gave back some ground to trade at $US0.9050.