Australian Stock Market Report – Afternoon 7/3/13

Afternoon Market Report
(17:00 AEST)

Local stocks saw their best gains in 19 months on Tuesday. That improvement was a distant memory on Wednesday with the index handing back the lion's share of yesterday's gains. It would be convenient to invoke weaker economic news locally and selling for regional markets as some of the factors informing todays selling, although the case would struggle to hold water on that basis alone. What is clear is that the neck wrenching volatility that has characterised recent days has left investors rather cautious about near term prospects for the market, despite the declines seen in recent weeks.

· Every sector measured by the ASX ended lower today, although there was more support in relative terms for utilities. Despite that support the sector still ended lower.

· Consumer related stocks attracted selling attention after retail sales figures for May missed expectations. Retail trade rose by 0.1 per cent in May after falling by a downwardly revised 0.1 per cent in April (previously up 0.2 per cent). Annual spending growth fell from 2.8 to 2.3 per cent - a 15 month low. Non-food spending rose by just 0.9 per cent over the year - marking the weakest annual growth rate in nearly two years. The takeout from today's data (once again) is that despite low interest rates household remain cautious in relation to spend money. Saving and paying down debt remain the fashion.

· In company news; Brambles (BXB) shares ended at $9.27 -8.0 -0.86%. CEO Tom Gorman has said the move will strengthen the group's financial position. Additionally Mr Gorman did not rule out acquisitions saying "this is not the last big thing we are going to do". Woodside Petroleum (WPL) finished down 3.35% after they cut their production target to a range of 85-89 mmboe from an earlier estimate of 88- 94 mmboe. Recent profit downgrades continue to plague Boart Longyear (BLY). The stock lost 11.7% hitting a record low of 49c today.

· There's plenty of scope for further volatility in Europe tonight with the release of key data on the services sector. France, Germany, the UK and the Eurozone announce respective services PMI reports. Eurozone retail sales numbers are also due for release in addition to those from France

[Kick off your trading day with our newsletter]