Australian Stock Market Report – Afternoon 4/10/2012

MARKET CLOSE
(4.30pm AEST)

The Australian share market resumed trade after the Easter break and tumbled into the red, following weaker than expected economic data out of the United States. The All Ordinaries Index (XAO) lost 28.7pts or 0.7pct to 4373.6, but came off earlier lows, following data which showed China unexpectedly reported a trade surplus in March. This stoked optimism that the People's Bank of China won't need to cut rates in order to stimulate growth.

US stocks fell by one percent overnight after last week's disappointing jobs report showed a slowdown in hiring that raised concerns about the strength of the nation's economic recovery.

Every sector on our market ended in the red, with energy and mining stocks under the most pressure. Shares in Caltex (CTX) eased by 1.5pct to $13.65 while Rio Tinto (RIO) shares were down 0.7pct to $64.85.

Financial stocks also lost ground, with the exception of Macquarie Group (MQG) which rose 0.5pct to $28.84. Shares in the National Australia Bank (NAB) lost 0.8pct to $24.58.

Regional pay TV operator Austar (AUN) rose 2.7pct to $1.52 after the Australian Competition and Consumer Commission (ACCC) finally gave the green light for Foxtel's planned $1.9 billion takeover of the company, following a year of deliberations. The ACCC released a statement claiming it wouldn´t oppose the deal after Foxtel provided court-enforceable undertakings that will prevent it from acquiring exclusive internet protocol television rights for a range of television programs and movie content, including the National Geographic Channel and Nickelodeon.

In other company news, Virgin Australia (VAH) closed steady at $0.42 after the airline acquired a 10pct stake in small regional airline Skywest, which services the mining industry. Rival Qantas (QAN) closed down 1.2pct to $1.65.

Economic data released today showed the number of job advertisements rose for the third straight month in March, lifting by 1pct. The data suggests that the unemployment rate will remain much lower than initially feared.

Meanwhile, the NAB business confidence index rose from a five month low of +0.7 in February to +2.6 in March, but this was still below the long-run average of +6.3. Business conditions improved from +2.7 to +3.6 in March, again below the long-run average of +5.5. The survey of 400 businesses took place from March 26-30.

According to the Australian Institute of Petroleum the national average retail petrol price rose by 1.0 cents to 151.6 cents a litre in the past week. CommSec believes higher wholesale prices and an end to discounting cycles should cause the national average pump price to lift by around 1-2 cents a litre in the coming week.

The Australian dollar ended the day's trade at US103.19c, €78.63c and £0.6481.

On the market overall, a total of 1.9 billion shares were traded, worth $3.48 billion. 321 were up, 681 were down and 393 were unchanged.

At 4.30pm AEST on the ASX24, the futures contract was at 4307, down 8pts.

Ahead tonight, data on wholesale sales is released in the US together with weekly chain store sales data. Alcoa kicks off the earnings season, releasing results after the bell.

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