Australian Stock Market Report – Afternoon 4-22-13

Afternoon Market Report
(17:00 AEST)

Monday saw a fairly constructive tone of trade to start a holiday shortened week. Weekend developments helped lift the spirit of investors. There was relief that the Italians had formed a Government at long last. Asian markets specifically were relieved that the G20 Communique presented no obstacles to the ambitions of the Bank of Japan in relation to its quantitative easing program.

Most sectors ended higher, the utility and technology sectors were the only groups to end in the red. On the other side of the ledger, the mining, energy and consumer discretionary sectors were the best improved groups. Locally there is a lean calendar for economic news in the days ahead with the focus being on the March quarter CPI data. However there are several key reports out of the US in coming days starting with existing home sales data tonight. These figures will resonate with investors particularly for the fact that the upswing in the housing market was one of the factors that drove the early part of the recovery for stocks. Any suggestion that the housing sector is stalling will compound existing growth concerns. Anticipation of looming US data could be an explanation for the limited turnover on Monday.

Oz Minerals slumped to its lowest levels in 10-years after it cut production guidance in its quarterly update. The copper and gold miner forecast an increase in costs this quarter. The stock ended down by 10%. Elsewhere, Santos continued to perform well despite a weaker production report last week which had been impacted by weather related issues. On Friday the group maintained production guidance notwithstanding the weaker report. Today the shares finished higher by 2.2%

Regional sentiment was also on a solid footing on Monday Japan´s Nikkei 225 gaining over 1.8% in the session session after the G20 refrained from criticising the BOJ´s shock and awe easing measures, effectively giving the green light for further Yen weakness. South Korea´s KOSPI rose 1%. At the time of writing S&P futures were 0.5% higher. although the Shanghai composite had slipped 0.1% to give back some of Fri´s hefty 2.16% gain and HK´s Hang Seng had eased 0.05%. A 1% rally in GOLD to above USD$1420 after its recent rout has also been aiding overall sentiment. OIL prices are similarly recovering some lost ground.

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