Australian Stock Market Report – Afternoon 5/30/14

EVENING REPORT
(5pm AEST)

The Australian share market was sold off today, meaning that the gains for the month were virtually wiped out. The All Ordinaries Index (XAO) closed lower by 25.4 points or 0.5 per cent today to 5473.8.

Over the course of May, the All Ords closed higher by just 0.1 per cent.

Mining stocks were once again the biggest drag today as the price of iron ore continued to fall, closing below US$96 a dry tonne. Shares in Fortescue Metals Group (FMG) closed lower by almost 3 per cent to $4.41 while BHP and RIO were both more than one per cent weaker.

Southern Cross Media Group (SXL) issued a profit warning today, citing lower ratings at its metropolitan radio station and its Network Ten (TEN) interests for a decline in revenue. SXL is expecting full year underlying NPAT to be down 10 per cent on last year's result of $89 million. SXL shares closed steady at $1.095 today but are down 35 per cent on the year.

Rare earths miner Lynas Corp (LYC) fell 18 per cent to 14c after coming back online following its share purchase plan and placement offer. New shares were offered at 11.3c under the plan.

Billionaire Premier Investments (PMV) Chai Solomon Lew has bought 3.5 million David Jones (DJS) shares or around 0.65 per cent of the company. Earlier this month the Foreign Investment Review Board (FIRB) gave the go-ahead for South African retailer Woolworths Holdings to take over DJS in a $2.15 billion deal. DJS closed higher by 1.5 per cent to $4.04 today while PMV was down 1.4 per cent to $8.78.

In economic news, private sector credit (lending) rose by 0.5 per cent in April after a 0.4 per cent lift in March. Annual credit growth rose from 4.4 to 4.5 per cent - the strongest growth in five years.

Overall housing credit lifted by 6.1 per cent on a year ago, with investor housing finance up 8.2 per cent - marking the strongest annual growth in 3½-years. Business and consumer credit were more mixed.

Term deposits fell by 1.2 per cent over the year - the biggest decline in 11 years.

On the market overall, a total of 2.2 billion shares changed hands, worth $7.9 billion. 479 were up, 481 were down and 389 were unchanged.

No major economic data is due for release in the US tonight.