Australian Stock Market Report – Afternoon 3/28/14

PM Report
(4.30pm)

A better day than we had expected with the Aussie dollar at a 4 month high.

At the close of trade the ASX 200 was up 16.8points thanks to after a solid run in last 2 hours of trade.

The miners continued to underperform, whilst financial and property stocks gained in a very low news session. Overnight the US share markets meandered through Thursday´s session as investors weighed mixed corporate and economic news. Shares in Citigroup fell by 5.4% after the Federal Reserve rejected the company´s plans to buy back shares and lift dividends. The Dow Jones index closed lower by 5 points or less than 0.1% and the NASDAQ lost 22 points or 0.5%.

The gold price fell again overnight and in the Asian session lost another US$2 an ounce to US$1,293/oz but we did see a reversal of fortunes in the gold mining space in the last 2 hours of trade. Newcrest Mining Limited (NCM) turned higher and closed up 1.24% higher and OceanaGold Corporation Limited (OGC) higher by 3.8% , while other smaller miners continued to lose ground.

Fortescue Metals Group (ASX:FMG) marked the official opening of its 40 million tonne per annum (mtpa) Kings Valley project at the Solomon Hub, which marks the completion of the groups US$9.2 billion expansion of its Pilbara operations. The completion of the has officially increased Fortescue's production capacity to 155mtpa a key milestone for the miner. The Spot Iron Ore - China Import (Fines 62% FE) up $0.40 to US$112.30/dry tonne, and by the close of trade the FMG share price lifted by 1.52% to $5.34.

GPT Group (GPT) announced after the close of trade on Thursday that its Wholesale Shopping Centre Fund (GWSCF) had acquired a 50 per cent interest in Northland Shopping Centre for $496 million from the Canada Pension Plan Investment Board (CPPIB). Northland Shopping Centre is located approximately 11 km north of Melbourne´s CBD, dominating its trade area with the 6th highest moving annual turnover among retail centres in Melbourne. GPT added 0.83% to $3.63 today.

World oil prices rose on Thursday night as investors responded to generally firmer US economic data. Investors also continued to watch the geopolitical situation in Eastern Europe. During the Aussie session the US NYMEX crude rose by US$0.04 or 0.04% to US$101.32 a barrel. It was a quiet day for energy stocks. Woodside Petroleum Limited (WPL) it was no surprise for the market today when WPL announced its Israel based Leviathan offshore gas project was again hit by more government and export set up delays. WPL share price lifted slightly to $38.65 while Yancoal Australia Limited (YAL) fell over 4.4% and Drillsearch energy (DLS) announcing a new oil discovery at its Western Flank project.

The Australian dollar hit a four-month during the session and was at US$0.9274 at the end of trade after reaching US$0.9297 mid-session.

It will be a big week next week on the economic front in Australia, with the release of February's private sector credit data on Monday, then on Tuesday the Reserve Bank Board meeting where the focus will on the language in the RBA's statement and the view on the rising Aussie dollar. Later in the week we will be focusing on February job vacancies, building approvals and retail spending. In the US Fed and interest rates will be squarely in focus; the key release being Non- Farm Payrolls at the end of the week and for china the manufacturing data will lead the way on Tuesday.

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