Australian Stock Market Report – Afternoon 9/19/2012

MARKET CLOSE
(4.30pm AEST)

Local stocks rallied in afternoon trade, after the Bank of Japan followed the US Federal Reserve and the European Central Bank in providing more monetary easing to stimulate the global economy. Stocks had been trading only marginally higher before the announcement from the BOJ, with the All Ordinaries Index (XAO) rising by 22.6pts or 0.5pct by close to finish at 4440.4, a four month high.

The Bank of Japan has expanded its asset buying and loan program by 10 trillion Yen to 80 trillion Yen, with the deadline for meeting the overall target extended by six months to December 2013. The move saw the Aussie dollar spike against the Yen and at 4.30pm AEST was buying ¥82.82.

Fortescue Metals Group (FMG) shares continued to rise today, boosted by its US$4.5 billion lifeline received yesterday from creditors, and a surge in the iron ore price. Iron ore rallied by 4pct to US$109.60 a tonne overnight. FMG, which rose 17pct during yesterday's trade, today gained 5.4pct to $3.69.

Elsewhere, construction and contract mining company MacMahon Holdings (MAH) came out of its trading halt, plummeting 39pct to $0.325. The CEO of MAH, Nick Bowen, has resigned as the company warned its earnings could fall by as much as 64pct this financial year due to increasing uncertainty over the outlook for new building work.

Upmarket retailer David Jones (DJS) released its full year results today, reporting a 39.9pct fall in earnings to $101.1 million, down from $168.1 million last year. Total sales were down 4.8pct. David Jones has contracted an independent property consultant to evaluate the potential sale price of its four stores in the heart of Sydney and Melbourne. However, chief executive Paul Zahra has insisted this does not mean David Jones is considering selling the four flagship stores. DJS shares today fell 0.4pct to $2.26 and are down around 5.5pct on the year. Rival Myer Limited (MYR) added 0.8pct to $28.73.

Healthcare stocks continued to do well today, outperforming the overall market. CSL Limited (CSL) rose 1.9pct to $43.69 while Cochlear (COH) was up 1pct to $68.

The Australian dollar received a boost on the rise in equity markets and at 4pm AEST was buying US104.65c, £0.6436 and €80.02c.

On the market overall, a total of 1.8 billion shares were traded, worth $4.14 billion. 524 were up, 407 were down and 363 were unchanged.

At 4.30pm AEST, the SFE 200 Futures market was at 4415, up 26pts.

The Dow Jones Index futures market was at 13662, up 92pts.

Ahead tonight, data on housing starts and existing home sales are released in the US.

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