Australian Stock Market Report – Afternoon 4/13/2012

AFTERNOON REPORT
(5pm AEST)

The Australian share market posted another solid session of gains today, to finish the trading week virtually unchanged. Yesterday and today's gains managed to negate losses in the earlier part of the week and it was clear investors were not spooked by the curse of Friday the 13th, with the All Ordinaries Index (XAO) up 42.5pts by close or 1pct to 4404.2.

Despite a slight dip around lunchtime when Chinese economic growth figures were released, the market traded higher for the majority of the session. The Chinese economy grew at an 8.1pct annual rate in the March quarter (consensus 8.4pct) down from 8.9pct in the previous quarter. It was the slowest annual growth rate in two and a half years.

Chinese retail sales in March were up 15.2pct on a year ago (consensus 15.1pct); industrial production was up 11.9pct (consensus 11.6pct) and fixed asset investment over the first three months of 2012 was up by 20.9pct (consensus 21pct).

The slower pace of growth combined with other data showing that inflation is in control gives the Chinese authorities scope to ease bank reserve requirements.

On the share market, most sectors finished stronger with particularly solid gains from mining stocks. Rio Tinto (RIO) added 2.3pct to $65.95 while Lynas Corporation (LYC) was up 7.8pct to $1.11. The company, which is principally involved in the exploration and development of rare earths minerals, gained after the High Court of Malaysia knocked back a request to review the recent decision to grant the company a temporary license for a processing plant.

Qantas (QAN) gained 1pct to $1.67, CEO Alan Joyce today backing calls for a second airport in Sydney.

Shares in toll road operator Transurban (TCL) added 0.5pct to $5.63 after announcing all its motorways generated more income in the three months to March, expect Sydney's M2 which is undergoing a major upgrade.

The Australian dollar fell on the China data and at 5pm AEST was buying US103.98c, £0.6522 and €78.92c.

On the market overall, a total of 2.1 billion shares were traded, worth $4.29 billion. 640 were up, 323 were down and 388 were unchanged.

At 5pm AEST on the futures exchange, the SFE 200 was at 4331, up 36pts.

Ahead tonight, consumer prices and confidence figures are released in the US. Earnings season steps up a notch next week with household names Microsoft, Coca-Cola and McDonald's among the companies releasing numbers.

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