Australian Stock Market Report – Afternoon 5/7/14

EVENING REPORT
(5pm AEST)

The Australian share market was sold off today following falls on US and European markets on fears some stock market valuations are too high.

After rising for the past three sessions, the All Ordinaries Index (XAO) today fell 43.6 points or 0.8 per cent to close at 5419.1 points.

Nearly every sector closed lower with the banks down 0.8 per cent and the materials sector lower by 1.5 per cent.

Retail stocks were mixed following a report which showed retail sales were weaker than expected in March. Shares in David Jones (DJS) and Myer (MYR) both fell 0.5 per cent, while JB Hi-Fi (JBH) was up 0.9 per cent to $19.18. Kathmandu (KMD) was a standout, up 7.4 per cent to $3.77 after announcing its 3Q sales grew by nearly 4 per cent due to colder weather in Australia and New Zealand.

Journalism, photography and production staff at Fairfax (FXJ) announced in late trade they would go on strike for 24 hours over proposed job cuts. FXJ has not released any statements to the ASX. Its share price fell by 1 per cent to $1.

Lynas Corp (LYC) continued to fall, down 10 per cent to 13.5 cents as it attempts to tap the market for $40 million through a share placement offer.

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

In economic news, Retail trade rose for the eleventh straight month, up by 0.1 per cent in March (although the result was below market consensus +0.4 per cent). Annual spending growth lifted from 5.0 per cent to 5.7 per cent. In the March quarter, inflation-adjusted retail sales lifted by 1.2 per cent. In nominal terms, retail trade rose by 2.1 per cent in the quarter - matching the strongest growth in 4½ years. Strongest growth in the quarter was by "Café and Restaurants" (up 5.5 per cent) after growing by 5.4 per cent in the December quarter - marking the strongest back to back gains in a decade.

On the market overall, a total of 1.6 billion shares changed hands, worth $4.5 billion. 365 were up, 544 were down and 382 were unchanged.

At 4.30pm AEST the SFE 200 Futures Index was at 5419, down 53 points.

Ahead tonight, the US Federal Reserve chief Janet Yellen gives testimony. Data on productivity, labour costs and consumer credit are also released in the US.