Australian Stock Market Report – Afternoon 4/18/2012

MARKET CLOSE
(4.30pm AEST)

The Australian sharemarket rose by 1.3 pct or 58.4 pts to 4427.2 today, making it the best session in close to two months. It was also the first time that shares improved this week.

Last night both European and American markets rose strongly. The International Monetary Fund (IMF) released its monthly outlook on the global economy and seemed more optimistic than many expected. The borrowing costs for the Spanish government eased overnight and some of America's largest businesses posted better than expected profit results between January and March this year.

All sectors improved with the major miners the outperformers. BHP Billiton (BHP), the world's largest miner told the market that production of its commodities has fallen so far this year (compared to the final quarter of 2011). The fall in production was partly due to industrial action and bad weather. BHP shares rose 2.78 pct or 95 cents to $35.10 while Rio Tinto (RIO) shares also jumped by 2.78 pct.

The major banks all ended in the black, with National Australia Bank (NAB) and Commonwealth Bank (CBA) rising by around 1.3 pct. ANZ Banking Group (ANZ) improved by around 1.1 pct and Westpac (WBC) edged higher by 0.3 pct.

The Bank of Queensland (BOQ) released its first half profit results today and made a loss of $90.6 million between September 2011 and February this year. The result was heavily impacted by bad loans and write-downs. The 2011 floods partly contributed to a slide in Queensland property prices which have also weighed heavily on the company. The BOQ is around 30 times smaller than the average size of the big four banks. It announced a fully-franked dividend of 26 cents a shares, expected to be paid out to eligible shareholders on May 25. BOQ shares rose 2.59 pct or 18 cents to $7.14.

Tomorrow, the latest report on imports will be issued, which is a useful indicator of economy-wide spending. Harvey Norman (HVN), Santos (STO), Woodside Petroleum (WPL) and Fortescue Metals (FMG) will be giving the market updates tomorrow.

No major economic news was released in the region today, however most markets ended significantly higher. Japan's Nikkei 225 index rose 2.14 pct or 202.55 pts to 9667.26, shares in South Korea, Hong Kong and China all rose by more than 1 pct.

Trading in the Cambodian Stock Exchange kicked off today, with Phnon Penh Water the first and only company to be trading on the exchange at the moment. The Cambodian government is trying to open up its economy and attract foreign dollars. You could expect other state-owned businesses to be sold and listed by the Cambodian government over the coming years.

In Europe last night, inflation readings for both the U.K and the Eurozone came in broadly in-line with expectations. A survey of institutional investors and analysts showed higher than expected confidence levels in Germany.

Tonight, we will find out if the British unemployment rate remains steady at 8.4 pct as expected. The Bank of England (BOE) will release the minutes from its most recent meeting. Key for markets will be any sign that Monetary Policy Committee members voted for increased asset purchases.

Last night, around 36 companies released their latest profit results including Coca-Cola, Johnson & Johnson and IBM. The three companies exceeded expectations.

Tonight, 71 companies are reporting, including YUM! Brands (the owner of KFC, Pizza Hut and Taco Bell), American Express and Halliburton.

Volume of shares traded came in at 1.91 billion today, worth $4.51 billion. 362 shares were up, 587 were weaker and 398 ended unchanged.

At 4.30pm AEST on the Sydney Futures Exchange, the ASX24 futures contract is largely flat.

Due to daylight savings, most major European markets are now trading between 5pm (AEST) and 1.30am (AEST). Futures in Europe are pointing to a slightly weaker start to trade tonight.

Dow Futures are currently a little higher; indicating that U.S stocks could open in the black tonight. Due to daylight savings taking place in the second week of March in North America and the end of daylight savings in Australia, U.S markets will now be trading between 11.30pm (AEST) and 6am (AEST).

Turning to currencies, the Australian dollar (AUD) buys US103.8 cents. The AUD is currently trading at £65.2 pence and €79.2 cents.

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