Australian Stock Market Report – Afternoon 5/30/13

MARKET CLOSE REPORT

(5pm AEST)

Local shares slumped by 0.9 per cent today, comfortably wiping out the previous two sessions of gains. The falls were partly due to the Organisation for Economic Cooperation and Development (OECD) cutting growth forecasts for the global economy overnight.

The OECD expects the Australian economy to grow by just 2.6 per cent in 2013. Just six months ago, it expected 3 per cent growth, and six months before that 3.7 per cent. The global organisation based in Paris said the persistently high Australian dollar was part of the reason for the cut in forecasts. The dollar has slumped by around US7cents against the greenback this month, however is still around US20cents stronger than the average over the past 20 years. The International Monetary Fund (IMF), a more reputable forecaster, cut growth forecasts for China overnight.

The energy sector was the lone improver today, while all other industries fell sharply. The mining stocks and defensive telcos were amongst the biggest losers.

Telstra (TLS), the sixth biggest company on the local sharemarket slumped by 2.85 per cent. The ACCC has reduced the wholesale broadband charges that ISPs need to pay Telstra to use its copper network.

Investors have become accustomed to weakness from our miners this year, with BHP Billiton (BHP) down 1.18 per cent, while Rio Tinto (RIO) slipped by 1.35 per cent. Newcrest Mining (NCM) fell by 1.8 per cent and Fortescue Metals (FMG) plummeted by 5.1 per cent.

The banks were dragged lower by National Australia Bank (NAB), which went ex-dividend today. NAB slumped by 4.03 per cent, or $1.23. It is paying out a 93 cent per share dividend on July 16,

The losses were extended following the Bureau of Statistics' quarterly investment report. Capital investment by Australian businesses fell by 4.7 per cent between January and March; making it the biggest fall in 3.5 years.

By the close of trade, 1.63 billion shares changed hands, worth $7.39 billion. 354 stocks ended higher, 548 fell and 370 finished flat.

[Kick off your trading day with our newsletter]