Australian Stock Market Report – Afternoon 6/3/13

Commsec afternoon Report

(17:00 AEST)

Sellers continued to make their presence felt in local trade on Monday ahead of a big week of economic news. The US will hold investor focus globally this week with several tier one data releases anticipated. The week will culminate with the main gauge of US employment, the Non-Farm Payroll report. Locally the menu is lighter by comparison although the RBA decision on Tuesday and the National Accounts data (GDP) on Wednesday will each have a significant bearing on investor sentiment.

The ASX200 started under pressure although it was able to consolidate late in the morning and improve into the early afternoon. At its best it was up by 7 points. Thereafter the market continued to weaken for the remainder of trade.

There were a number of economic reports released on Monday. The April Retail Trade figures were a letdown on a number of counts. Whilst the 0.2% increase for the month was weaker than expected, the main disappointment was the waning of the momentum that was evident at the start of the year. In the first two months of the year retail trade grew by 1.3% on each occasion which was the best start to a year since the early 2000's. The slowdown in recent month's talks to the point that general economic momentum is waning at present as the non- mining economy attempts to pick up where the mining sector left off as a driver of growth. In itself the tepid retail numbers weren't a case for lower rates but they certainly add to the case that rates are yet to find their low point.

Profit warnings have been a feature of recent weeks and another one was offered up today. Bionic ear maker Cochlear (COH) said that NPAT for the full year is expected to be in the range of $130m to $135m compared to an earlier estimate of $146 to164m. The group expects to pay a final dividend of least 125 cents. COH shares ended down 18%

Telstra (TLS) has been in focus in recent days after asbestos fibre was exposed at a site in Sydney´s west during work to roll out the National Broadband Network. Telstra has said it currently faces no financial risks from people being potentially exposed to asbestos in its pits.

Tonight in the US data released will include the Manufacturing ISM report in addition to Construction Spending & Vehicle Sales.

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