Australian Stock Market Report – Afternoon 6/5/13

AFTERNOON REPORT

(5pm AEST)

The Australian share market was sharply sold off during Wednesday's trade as economic growth figures missed expectations and as Japanese stocks shed almost four per cent on Prime Minister Abe's growth strategy.

The Australian economy grew by 0.6 per cent in the March quarter after a 0.6 per cent increase in the December quarter (forecasts centred on a 0.8 per cent rise). The economy has grown 2.5 per cent over the past year - below the decade average growth rate of 3.0 per cent.

The All Ordinaries Index (XAO) closed lower by 61.5pts or 1.3 per cent to 4825.2pts, reducing yearly gains to just 3.4 per cent.

Financial players bore the brunt of the selling with the sector down two per cent.

A four per cent rise in the iron ore price supported Fortescue Metals Group (FMG) shares which added 2.6 per cent to $3.55, however bigger players BHP Billiton (BHP) and Rio Tinto (RIO) ended softer.

Troubled surf wear retailer Billabong (BBG) continued to add to yesterday's losses, falling a further 6.5 per cent to 21.5c. BBG has fallen 79 per cent since the start of 2013 and yesterday issued a profit downgrade after confirming takeover talks with two interested parties had ended.

Companies which are heavily exposed to the US did well as the Australian dollar continued to weaken against the greenback. Hearing implant maker Cochlear (COH) added 2.3 per cent to $57.31 while pallet supplier Brambles (BXB) was up 2.9 per cent to $9.30.

The Australian dollar ended the day's session at US95.83c, £0.6248 and €73.19c.

On the market overall, a total of 2.1 billion shares changed hands, worth $5.8 billion. 303 were up, 582 were down and 359 unchanged.

Ahead tonight, the ISM services index is released together with factory orders and the ADP national employment index.

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