Australian Stock Market Report – Afternoon 6/19/13

Commsec Afternoon Report

(17:00 AEST)

The behaviour of financial markets in recent months has been defined by one issue. What will the Fed do with Q.E. To this end it's interesting to note how composed the markets have been in the last day given the import of the day ahead in the US. Wednesday in Washington will see the Fed conclude its 2 day meeting with a press conference. In this forum the US Fed Chairman is expected to provide some clarity in relation to its bond buying program. 'Tapering' has been an expression frequently used by market commentators in relation the $85 billion in bond purchases the central bank undertakes on a monthly basis as the foundation of its quantitative easing program. Any suggestion to night by Mr Bernanke that the Fed is committed to reducing its bond purchases will likely see volatility return to the markets.

Locally, sellers got some traction in early trade, although the weakness had exhausted itself my midday and thereafter the market moved higher. Despite the early selling the index wasn't pushed into negative territory. The only point taking the gloss off the move higher was the fact that it happened on lower volume. Additionally sellers are having more trouble making impact giving the ASX200 has fallen by around 12% over the course of the last month

Every sector measured by the ASX ended higher. There was evidence that risk appetite has improved. Industrials were the best gainers, particularly some of the names in the mining services space, for example Boart Longyear was up by almost 10%. Mining engineer Worley Parsons rose 3% after South Korean shipbuilding giant, Samsung Heavy Industries awarded a design and engineering contract for a floating production, storage and offloading vessel, which will operate at an offshore deep water oil field in Nigeria. The contract is worth almost $106 million.
Whitehaven Coal (WHC) shares rose by more than 4%. On news that Nathan Tinkler had sold his stake in the coal miner to Farallon Capital Management. Farallon now owns 16.6% of WHC. The remainder of the Tinklers stake is said to have gone to other creditors. The price of the share sale was $2.96c per share which is said to equate to about half of the $700m which Tinkler owes

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