Australian Stock Market Report – Afternoon 5/6/14

Evening Report
(17:00 AEST)

Tuesday's session saw a tussle between buyers and sellers, albeit it was an exchange that took place with the index occupying positive territory over the session. Volumes were conspicuously low with only $3.3bln in shares having changed hands. As the session drew to a close the ASX 200 found some comfort in the RBA statement that accompanied its decision to leave rates on hold, although the substance of the text varied little in the last month. The Reserve Bank left the official cash rate on hold at 2.5% for an eighth consecutive month as it continues to promote the hand over from the mining to the non-mining part of the economy. The official cash rate has been on hold since August 2013 when it was cut from by 0.25% to 2.75%.

Consumer Discretionary stocks were amongst the best supported groups over the session. Wesfarmers (WES) shares rose after highlighting the impact of lower coal prices. The group whose 2 mines in Queensland and NSW delivered earnings before interest and tax of $59 million in the first half of the 2013/14 financial year will sell metallurgical coal for 16 % less than in the previous March quarter.

Elsewhere in the sector employment website Seek (SEK) said it will launch an initial public offering for Zhaopin in the United States, without disclosing the value of the offer or its timing. Zhaopin is the second largest online recruitment services provider in China, which Seek believes is set to become the world´s biggest online employment market place.Seek paid $US132.8 million in February last year to increase its stake in Zhapoin from 55.5% to 78.2%.

Rare earths miner Lynas(LYC)announced a share purchase plan to raise up to A$40m to boost working capital during ramp-up at the company's Malaysian Lynas Advanced Materials Plant (LAMP).The plan will allow existing shareholders to purchase additional shares at a discount to the market price for a particular period without paying brokerage fees. LYC said that the new shares will rank equally with existing shares on issue. The price will be a 17.5% discount to the average price during the five days up to and including the shortfall date, likely to be Tuesday 27 May.

In offshore trade tonight, the final readings of the Eurozone PMIs will be released today are unlikely to deviate too far from the flash estimates released a few weeks ago. The Eurozone composite PMI is at a multiyear high and indicative of going recovery in the Eurozone economy.