Australian Stock Market Report – Afternoon 7/6/2012

AFTERNOON REPORT
(5pm AEST)

It seems it takes a lot to excite investors in this current climate. Despite rate cuts overnight from both the European Central Bank and the People's Bank of China, investors sold out of equities today fearing the stimulus wouldn't be enough. There was also some trepidation and profit taking ahead of a key jobs report coming out of the US tonight.

Locally, the All Ordinaries Index (XAO) closed down 10.9pts or 0.3pct to 4199, while the S&P/ASX 200 Index (XJO) lost 11.4pts or 0.3pct to 4157.8.

Energy stocks were among the worst performers, after the crude oil price continued to ease during Asian trade. At 4.30pm AEST the Nymex contract was worth US$86.34 a barrel. Shares in Santos (STO) lost 2.4pct to $10.69 while Caltex (CTX) was down 0.2pct to $14.19.

Financial stocks were mixed. The Commonwealth Bank (CBA) increased by 0.5pct to $54.09 while the ANZ (ANZ) was also firmer, up 0.4pct to $22.58. Shares in Macquarie Group (MQG) were down 0.6pct to $26.16.

Retail stocks looked solid. Earlier this week official data showed retail sales rose 0.5pct in May, stronger than expected. Shares in Myer Limited (MYR) today added 3.7pct to $1.81 while Kathmandu (KMD) firmed by almost 4pct to $1.1185.

Fairfax Limited (FXJ) shares closed steady at $0.585 despite an initial sell-down as the market digested the sale of a 3.7pct stake in the company by Australia's richest woman and Fairfax's largest shareholder Gina Rinehart. The sale went through on close yesterday and accounted for 86.5 million shares or $50.2 million worth of stock. Ratings agency Standard and Poor's today downgraded the outlook for Fairfax to negative from stable.

Shares in the Ten Network (TEN) of which Gina Rinehart has a 10.6pct stake, rose 2.1pct today to $0.48.

There was no economic data released locally although the Australian dollar hit a record high against the Euro following the ECB rate cut. At 5pm AEST the Aussie was worth €82.9c, down from €83.18c. The Aussie was also worth US102.6c and £0.66.

On the market overall, a total of 1.24 billion shares were traded, worth $2.89 billion. 406 were up, 460 were down and 349 were unchanged.

At 4.30pm AEST on the ASX24, the share price futures contract was at 4125, down 6pts.

Ahead tonight, non-farm payrolls (jobs data) for June are released in the US. The past few months have been disappointing with European debt woes white-anting the US economic recovery. The hope is that 90,000 jobs were created in June - an improvement on the 69,000 increase in May. The jobless rate is expected to have held steady at 8.2 per cent.

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