Australian Stock Market Report – Afternoon 4/28/14

EVENING REPORT
(4.30pm AEST)

The Australian sharemarket peaked at around 1.30pm (AEST) today, only to give back those gains in late trade to finish flat. At the high point the XAO was up 0.25 per cent while the index was down 0.2 per cent at its lowest level. The market is still hovering around near six-year highs.

Weakness from the miners accelerated late in trade, with both BHP Billiton (BHP) and Rio Tinto (RIO) doubling their earlier losses to close 1-1.5 per cent weaker. BHP, RIO and Fortescue (FMG) wiped out 8.36pts from the XAO. Newcrest (NCM) helped the sector with its 4.8 per cent surge, adding 1.31pts to the index.

The major banks added most to the XAO, with ANZ rising by 0.78 per cent and trading at a record high together with Westpac (WBC) which rose by 0.22 per cent and is at a record high. CBA is closing in on its record levels.

This afternoon, the International Monetary Fund (IMF) released its latest Regional Economic Outlook for the region. In its own words, "Australia's economy is likely to grow below trend as the investment phase of the mining boom passes its peak and begins to decline. Growth is expected to remain broadly stable at 2.6 percent in 2014, with a modest pickup going in 2015. "

By the close of trade, 1.7bn shares changed hands worth $4.28bn. 386 stocks finished higher, 580 closed in the red and 356 were unchanged. On the economic front, according to the weekly petrol price report by the Australian Institute of Petroleum, the national average price of petrol eased by 3.8 cents per litre to 151.6c last week. Despite the fall in petrol prices last week, we are currently around the bottom of the discounting cycle, meaning higher prices are likely over the coming days. The Singapore gasoline price is around its highest level in ten months, while the Australian dollar has also weakened against the greenback - both potentially pushing petrol prices higher.

Tonight should be a quiet start to the week for global markets. In Europe, the Bundesbank (Germany's central bank) is expected to release its monthly report. This contains speeches, articles and statistics relating to Germany's economy. It isn't typically market moving. U.S housing data will also be released tonight. Locally tomorrow, Wesfarmers (WES) will be releasing its 3Q sales numbers. The Brisbane Broncos (BBL) will be holding its Annual General Meeting. BBL has been listed since 1989 and has a market capitalisation (size on the sharemarket) of close to $29 million. It is generally a very thinly traded stock. The Japanese sharemarkets will be closed for the Showa Day holiday tomorrow.

For the remainder of the week, the focus will be mostly on offshore markets with the U.S. central bank's two day meeting, GDP and the non-farm payrolls the highlights. An update on the health of China's manufacturing sector will be important for the Australian mining sector and the Australian dollar.