Australian Stock Market Report – Afternoon 7/31/13

AFTERNOON REPORT
(5pm AEST)

Despite solid gains throughout the course of the day, end of month squaring saw the Australian share market close only modestly higher on Wednesday.

The All Ordinaries pared more substantial gains to close up by 9 points or 0.2 per cent, still that was the best improvement by the Australian market this week.

Over the month of July the market improved by 5.5 per cent which is the strongest performance since October 2011.

Most sectors ended the day higher, however the breakup of a Russian potash cartel overnight sent fertilizer prices tumbling, weighing on the Materials Sector (XMJ) which was down by 0.5 per cent. Incitec Pivot (IPL), which produces a different kind of potash to the one affected by the cartel split, saw a selloff in its shares with the company trading lower by 1.1 per cent.

Qantas (QAN) shares were down 0.8 per cent today. The airline announced it will be increasing its fuel surcharges on international routes amid rising fuel costs and depreciation in the Australian dollar. It also indicated it would raise the base fair for its domestic services by around 2-3 per cent.

After the bell, Suncorp Group (SUN) announced it is expecting FY13 profit to come in between $480-500M. SUN will also pay a 20c per share special dividend.

In economic news, private sector lending data was released today, the results of which further support evidence of an interest rate cut next week. Private sector credit rose by a modest 0.4 per cent in June bringing annual credit growth to 3.1 per cent.

On the market today 1.7 billion shares were traded worth $4.6 billion. 535 stocks closed higher, 379 lower and 295 were unchanged.

All eyes will be on the US FOMC meeting tonight along with June quarter GDP as investors look for clues on the tapering of the Federal Reserve's QE program.

Ahead in Australia tomorrow: the RP Data-Rismark home price index, home sales and manufacturing performance for the month of July is released.

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