Australian Stock Market Report - Afternoon 3/26/2012

MARKET CLOSE
(4.30pm AEDT)

The local share market ended the day's trade on a subdued note, which was expected to be the theme of the day given no release of local economic data and mixed offshore leads on Friday. Despite a strong start, mining stocks dragged on the overall market seeing the All Ordinaries Index (XAO) close down 5.5pts to 4355.2.

The materials sector closed down 0.4pct despite strength on the London Metals Exchange on Friday. Index leader BHP Billiton (BHP) lagged, down 0.6pct to $34.19 while iron ore miner Fortescue Metals Group (FMG) closed down 1.3pct to $5.92. Junior minerals explorer Phillips River (PRH) bucked the trend, rising 41.4pct to $0.205 after agreeing to sell its flagship gold and copper exploration project and a disused mine, both in Western Australia, to gold miner Silver Lake for $20 million worth of Silver Lake shares. If approved by shareholders, the share subscription would provide Phillips River with $1.8 million in cash to meet funding and liquidity requirements

The big four banks closed higher however a fall from Macquarie Group (MQG) saw the financial sector close steady. MQG finished down 0.7pct to $28.58 while the Commonwealth Bank (CBA) was up 0.7pct to $49.48. The Bank of Queensland (BOQ) closed steady at $7.30. BOQ today announced a $450 million capital raising to shore up its balance sheet, after swinging to an expected $91 million net loss in the first half of its financial year.

Shares in Qantas (QAN) gained 2pct to $1.765 with the airline today announcing a joint venture with China Eastern Airlines worth US$198 million. The joint venture will see the creation of Jetstar Hong Kong, flying to mainland China, Japan, South Korea and southeast Asia from mid next year. The new airline will start with three Airbus A320s in 2013, growing to 18 A320s by 2015. Rival Virgin Australia (VAH) lost 1.1pct today to close at $0.46.

The national average retail petrol price rose by 3.6cents to a three and a half year high of 150.7 cents per litre last week as a weaker Australian dollar drove up prices. In Australian dollar terms the Singapore gasoline price rose by $1.16 (0.9pct) last week to a fresh 3½ year high of $130.90 a barrel. Today, the national average wholesale (terminal gate) unleaded petrol price stood at 142.7 cents a litre, up 0.6 cents a litre from a week ago and the highest level since October 20 2008. CommSec expects pump prices to stabilise around current levels.

A lack of economic data saw the Australian dollar finish the day's trade relatively unchanged against the greenback. At 4.30pm AEDT the Aussie was buying US104.47c, £0.6588 and €78.81c.

On the market overall, a total of 2.1 billion shares were traded, worth $3.63 billion. 541 were up, 508 were down and 384 were unchanged.

At 4.45pm AEDT on the ASX24, the share price futures contract was at 4272pts, down 13.

Ahead tonight; data on pending home sales, the national activity index and the Dallas Fed manufacturing index are released in the US.

Steven Daghlian, CommSec Market Analyst

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