Australian Stock Market Report – Afternoon 3/28/12

AFTERNOON REPORT
(4.30pm AEDT)

Australian stocks closed at their highest levels in almost five months today as investors snapped up financial and consumer stocks, encouraged by commentary from the Reserve Bank of Australia. The All Ordinaries Index (XAO) rose above 4400 for the first time this year, adding 39.8pts or 0.9pct to 4431.4 while the S&P/ASX 200 Index (XJO) firmed by 42.2pts or 1pct to 4343.5.

Despite a flat start on the back of falls in European and US share markets, local stocks started to rally around lunchtime in the East, following the release of the RBA's Financial Stability Review. In the report, the central bank essentially reassured consumers Australia's banking system remains in a relatively strong position.

The local financial sector gained 1pct today while the consumer staples sector was firmer by 1.4pct and the consumer discretionary sector added 0.8pct.

Materials stocks also performed well despite a weak start, with shares in Fortescue Metals Group (FMG) up 2.1pct to $5.98 and Newcrest Mining (NCM) up 2.9pct to $30.09.

There were calls today for a police investigation following newspaper claims of Pay-TV piracy at Newscorp (NWS). Treasurer Wayne Swan called the allegations disturbing. NWS shares rose 0.5pct to $19.48.

Still in that sector and regional Pay-TV operator Austar (AUN) will go ahead with its shareholder meeting on Friday, to give investors a chance to vote on the planned $2 billion takeover of the company by Foxtel, despite the competition watchdog delaying its own hearing on the bid. The Australian Competition and Consumer Commission has postponed its second court hearing on the deal from April 5 to April 13. AUN shares fell 1.7pct today to $1.455.

Fiji's military government today said it will take control of national carrier Air Pacific from Qantas (QAN). Fiji currently owns 51pct of the carrier while Qantas has a 46.3pct stake. Qantas has been trying to sell its stake in Air Pacific for some time but made no announcement to the market today. QAN closed up 1.1pct to $1.80.

The Australian dollar ended the day's trade weaker against the greenback and at 4.30pm AEDT was worth US104.36c, €78.28c and £0.6539.

On the market overall, a total of 2.411 billion shares were traded, worth $5.1 billion. 552 were up, 436 were down and 403 were unchanged.

At 4.30pm AEDT on the ASX24, the future contract was at 4357, up 29pts.

Ahead tonight, data on durable goods orders is released in the US

Juliette Saly

CommSec Market Analyst