Australian Stock Market Report – Afternoon 6/26/2012

AFTERNOON REPORT
(4.30pm AEST)

Local stocks closed in negative territory for a fourth consecutive session today, although managed to fare better than expected given the weak offshore lead. US and European markets slumped overnight after ratings agency Moody's downgraded the Spanish banking sector, and after Cyprus and Spain formally requested European aid. The All Ordinaries Index (XAO) closed down 15.7pts or 0.4pct to 4056.3 while the S&P/ASX 200 Index (XJO) fell 14.5pts or 0.4pct to 4013.3.

Reserve Bank Assistant Governor Guy Debelle today delivered a speech in Adelaide, saying there's no risk of a housing collapse in Australia and the thought is not something that keeps him awake at night. He says he's more concerned about the outlook for the European Union, a concern which saw investors bail out of stocks for a fourth consecutive session today.

Media stocks stole the headlines today.

Firstly, it was confirmed that Australia's richest woman Gina Rinehart has increased her stake in the Ten Network (TEN). Ms Rinehart purchased 39.2 million shares for just under $20 million dollars on June 19 and now owns 143.7 million TEN shares. Ms Rinehart also has an 18.7pct stake in Fairfax (FXJ) but has indicated she'll sell that if her company doesn't get three seats on the board. TEN today fell 2.9pct to $0.50 while FXJ was lower by 3.5pct to $0.55.

Meanwhile, former Woodside Petroleum (WPL) CEO Don Voelte has replaced David Leckie as head of Seven West Media (SWM) as Mr Leckie takes on a new role as Executive Director of Seven Group Holdings (SVW). SWM shares slumped 13.7pct today to $1.70 while SVW lost 2.3pct to $7.52.

Elsewhere in the sector, News Corporation (NWS) rose on speculation from one of its own publications, The Wall Street Journal, that the company is splitting in two. NWS finished higher by 2.4pct to $20.79.

Another winner was surf-wear retailer Bilabong (BBG), rebounding from yesterday's sharp sell-off in the wake of the company's profit downgrade. BBG shares rose 6.3pct to $1.02.

The Aussie dollar managed to hold above parity for most of the session and at 5.15pm AEST was worth US100.27c, £0.6431 and €80.23c.

On the market overall, a total of 1.8 billion shares were traded, worth $3.69 billion. 314 were up, 742 were down and 437 were unchanged.

At 4.30pm AEST on the ASX24, the futures contract was at 3979, down 4 pts.

Ahead tonight, the S&P Case/Shillerhome price index and the Richmond Fed index are released in the US.

[Kick off your trading day with our newsletter]