Australian Stock Market Report – Afternoon 5/13/14

EVENING REPORT
(5pm AEST)

The Australian share market enjoyed a solid gain today, ahead of the release of the 2014 Federal Budget. Our market took its cue from record highs on Wall Street overnight, with the All Ordinaries Index (XAO) adding 0.9 per cent or 46.4 points to 5475.4 points.

Overnight there were broker upgrades for banking and mining sectors which supported offshore markets. Every sector on our market except for the property trust sector moved higher. The financial sector added 0.6 per cent while the materials sector was firmer by 1.9 per cent. At one point during trade Commonwealth Bank (CBA) shares hit a record high of $80 per share. They closed higher by 52c or 0.7 per cent to $79.90.

Heading the other way was chemicals explosives manufacturer and supplier Orica Limited (ORI). Its 1H profit fell almost 8 per cent to $242.1 million, below expectations. The interim dividend of 40c per share will be paid on the 1st July. ORI shares fell almost 4 per cent to $21.09.

Copper and gold producer PanAust (PNA) was a standout, rising 34.2 per cent to $2.12. The company has rejected a $2.30 full takeover offer from a majority shareholder, Guangdong Rising Assets Management, but allowed the company access to its books.

Aurora Oil and Gas (AUT) rose almost 6 per cent to $4.18 on an increased $4.20 per share offer from Baytex Energy which the company has recommended shareholders accept.

For more company news, please read the Mid-Session report.

In economic news, the number of new owner-occupier housing loans fell by 0.9 per cent in March. The number of loans by owner-occupiers for the construction of homes rose by 2.1 per cent in March - the 8th consecutive monthly rise - the longest winning streak in records going back 25 years. The value of owner-occupier construction loans rose by 3.5 per cent in March.

The ABS has released figures on property prices across the capital cities. The average price of a residential home (houses and units) across Australia is $546,500, up 8.8 per cent on a year ago.

Chinese industrial production rose at an 8.7 per cent annual rate in April, below forecasts (8.9 per cent). However in the month, industrial production lifted by 0.82 per cent in April - the strongest monthly growth in eight months. Chinese retail sales rose at an 11.9 per cent annual rate in April, below forecasts (12.2 per cent). In the month retail sales grew by 0.83 per cent, down from the 1.24 per cent gain in March.

On the market overall, a total of 1.9 billion shares changed hands, worth $5.6 billion. 515 were higher, 425 were lower and 364 were unchanged.

At 4.45pm AEST the SFE 200 Futures Index was at 4587, up 50 points.

Ahead tonight, the Australian Federal Budget is handed down. In the US, retail sales and import/export figures are released.