Australian Stock Market Report – Afternoon 6/25/2012

AFTERNOON REPORT
(5.30pm AEST)

Local stocks have started the trading week in the red, as investors opt to stay out of the market ahead of a key European Union summit later this week and square their books ahead of the end of the financial year. The All Ordinaries Index (XAO) today lost 21.8pts or 0.5pct to 4072, while the ASX 200 (XJO) lost 20.4pts or 0.5pct to close at 4027.8.

Energy and mining stocks were once again some of the worst performers, despite strength in commodities. The oil price is back above US$80 a barrel as a cyclone forms in the Gulf of Mexico, potentially threatening supply. Meanwhile a major investment bank today downgraded material stocks in the wake of the implementation of the mining and carbon taxes. Shares in index leader BHP Billiton (BHP) lost 1.4pct to $31.07 while Rio Tinto (RIO) was weaker by 0.2pct to $55.90.

Financial stocks were mixed, with shares in Westpac (WBC) lower by 0.5pct to $20.65 and the ANZ (ANZ) up 0.3pct to $21.34.

Making news today, senior editors at The Age and Sydney Morning Herald newspapers resigned from their posts, amidst Fairfax's (FXJ) restructure announced last week. Shares in FXJ lost 1.7pct by close to $0.57.

Surf wear retailer Billabong (BBG) was hit hard as it resumed trade in the wake of last week's profit downgrade. Billabong has successfully raised $155 million through institutions, which accounts for 79pct of new shares on offer in its bid to raise $225 million capital. It's understood founder Gorgon Merchant will pick up $30 million worth of new stock in the raising, which offers six new discounted Billabong shares for every seven owned. The retail component of the offer opens on Friday. Billabong announced it is expecting a major fall in profits last week, just three months after walking away from a $3.30 per share takeover offer.

Financial services group Perpetual Limited (PPT) was one of the winners today, as it announced a massive restructure which includes pay cuts for its board members. PPT shares gained 3pct to close at $24.03.

The Australian dollar fell today but is still holding above parity with the greenback, worth US100.08c. It is also buying just over 80 Euro cents.

Commodities are slightly higher with gold just under US$1574 an ounce, and oil back above US$80 a barrel.

On the market overall, a total of 1.7 billion shares were traded, worth $3.66 billion. 330 were up, 722 were down and 402 were unchanged.

At 5.30pm AEST the Futures Index was at 3989, down 8pts.

Ahead tonight data on new home sales is released in the US.

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