Australian Stock Market Report – Afternoon 6/14/13

MARKET CLOSE REPORT

(4.30pm AEST)

After a lacklustre run this shortened trading week, the Australian market recorded its biggest daily rise of 2013. The All Ordinaries Index (XAO) jumped by a solid 1.9 per cent after two straight sessions of 0.6 per cent losses.

Almost all sectors ended higher today, with the defensive healthcare stocks the exceptions. The miners have done it tougher than most this calendar year, slumping by 16.2 per cent in 2013. Today however, the miners were the biggest contributors to the gains, up 2.3 per cent as a sector.

Just in case there was any trace of doubt, the last 24 hours have served as a reminder of the degree to which the Fed is driving market sentiment at present. Statements from the prominent US Fed commentator Jon Hilsenrath in the Wall Street Journal have pointed to Fed Chairman Bernanke using next week's FOMC press conference to temper market expectations regarding Fed policy tightening.

As a consequence. There were substantial moves in bond and currency markets in addition to solid gains in equity markets. The bid was held in regional trade on Friday with most indices gaining ground. Central to the improved tone was the positive tone in the Japanese market following the extreme volatility seen in recent sessions. One of the features of Friday's session was the fact that the market ended at the best levels of the day on solid volume. This dynamic highlights one of the main risks in the markets. The scale of the selling in recent weeks means that prices are now more susceptible to better news or at a minimum, an absence of bad news.

Substantial volume was traded today, with 1.5 billion shares changing hands, worth $5.3 billion. 572 stocks ended higher, 350 lost ground and 386 finished unchanged.

Looking ahead, the US will be in focus overnight, with consumer sentiment numbers one of the highlights. Around 70 per cent of the American economy is reliant on household consumption to drive growth. Consumer confidence is expected to rise from 84.5 to 84.9. This is based on a survey of around 500 consumers. Industrial production, business inflation and the US current account are all due for release tonight.

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