Australian Stock Market Report – Afternoon 4/15/14

EVENING REPORT
(4.30pm AEST)

The Australian sharemarket partly made up for the substantial losses recorded on Monday. The All Ordinaries Index (XAO) rose by 0.5 per cent after recording its worst performance in four weeks yesterday. The index failed to finish above the key 5400pt level. It was a quiet session on the volume front, with only $3.9 billion worth of shares changing hands leading up to a number of public holidays.

The miners were in focus as Rio Tinto (RIO) and OZ Minerals (OZL) issued quarterly production reports. RIO fell a little short of the market's expectations, while cutting its forecasts for the both coking coal and alumina. Iron ore production expectations were maintained. RIO generates almost all its earnings from the sale of iron ore to China. Ore production fell by 6 per cent over the March quarter; however is still up by around 10 per cent over the past year. RIO closed 0.14 per cent firmer. Tomorrow, both BHP Billiton (BHP) and Fortescue Metals (FMG) issue quarterly production numbers. Wednesday will be one of the busiest days for Chinese economic news and could impact our miners and dollar.

All sectors rose at least modestly today, with the big four banks edging higher by about 0.5 per cent. Defensive telco, Telstra (TLS) rose by 0.5 per cent; remaining above $5.00 per share.

On the economic front, the Reserve Bank board minutes suggested that the central bank is no hurry to raise rates. The RBA has kept the cash rate at 2.5 per cent since August 2013. Developments in the employment story and inflation could be play important roles in the RBA's interest rate decision making process. CommSec economist Savanth Sebastian said that "It is clear from the latest minutes that Board members see the glass as half-full rather than half-empty. Home building is growing strongly and will boost the economy over the next year. And stabilisation of the job market will provide further momentum for the economy."

The Australian dollar buys US93.9c after hitting a high of US94.2c overnight.

Looking ahead, 20 large companies are issuing earnings tonight, including Charles Schwab, Yahoo! and Intel. Consumer inflation, manufacturing and housing data will be in focus in the U.S. No data is scheduled for release in Europe.

Tomorrow, BHP and Fortescue issue production reports. A number of Chinese economic readings (including GDP/growth) will be in focus together with readings on Australia's building and construction industries.