Australian Stock Market Report – Afternoon 8/20/2012

AFTERNOON REPORT
(4.30pm AEST)

Investors took somewhat of a breather today, as China's Shanghai Composite fell to its lowest level since 2009 on worries there may not be any forthcoming stimulus from the Central Bank of China. The mood was in stark contrast to global markets on Friday, where US and European markets gained albeit in thin trading volumes. European markets rose to 13-week highs as Germany gave its backing to the European Central Bank's efforts to support the Eurozone while the S&P 500 Index on Wall Street hit a four year high. Locally, the All Ordinaries Index (XAO) fell 1.9pts to 4391.9.

Shares in the Commonwealth Bank (CBA) and Telstra (TLS) were among the biggest drags on the local bourse today, as the companies traded without rights to their dividends. CBA went ex-dividend paying a record $1.97 per share to its investors, while TLS paid 14c per share. JB Hi-Fi (JBH), also went ex-div, paying 16c per share to its shareholders. CBA shares today fell $1.55 or 2.7pct to $55.80 while TLS lost $0.20 or 5.1% to $3.70. JBH fell $0.29 or 3pct to $9.46.

Mining stocks also lost ground today. Rio Tinto (RIO) fell 1.5pct to $54.50 and Fortescue Metals Group (FMG) was lower by 2.1pct to $4.11. BHP Billiton (BHP), which comes out with its first half numbers on Wednesday, was slightly higher at $33.03.

Among the companies reporting today; Bendigo and Adelaide Bank (BEN) fell after reporting a 43pct drop in full year profit to $195 million, as the company wrote down the value of its margin lending business and grappled with higher funding costs. Weaker demand for loans also impacted the result. BEN shares today fell 0.1pct to $8.68.

Meanwhile, Bluescope Steel (BSL) came out with a $1.04 billion loss for the year, which had been factored in to market expectations. BSL, which announced a joint venture with Japan's Nippon Steel last week, saw its share price fall by 1.3pct today to $0.395.

According to the Australian Institute of Petroleum, the national average retail petrol price rose by 2.6 cents to 142.9 cents a litre in the past week, a ten-week high. In just the past the past two months the Singapore gasoline price has risen by over $28 a barrel or 18 cents a litre. Similarly the national average wholesale (terminal gate) unleaded petrol price has risen by 18.5 cents from recent lows, while retail prices are up by nine cents on average.

CommSec expects the national Australia average retail petrol price (pump price) to rise by a further three cents a litre in the next seven to ten days.

The Australian dollar remains strong and at 4.30pm AEST was worth US104.51c, €84.67c and £0.6656.

On the market overall, a total of 1.9 billion shares were traded, worth $6.37 billion. 555 were up, 403 were down and 338 were unchanged.

At 4.30pm AEST on the futures exchange, the SFE200 Futures was at 4347, up 17pts. The Dow Jones Futures was at 13246, down 1pt.

Ahead tonight, the national activity index is released in the US.

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