Australian Stock Market Report – Afternoon August 25, 2014

Traders work on the floor of the New York Stock Exchange shortly after the market's opening in New York July 28, 2014. REUTERS/Lucas Jackson

ASX 200; first fall in more than a week

 Monday saw sellers return to the Australian share market for the first time in 7 session. Buyers made several early attempts at pushing the index higher, although they were thwarted on each occasion. The ASX 200 opened with a loss of 7 points; at session highs it was almost 5 points to the better. At the nadir of the day the market was at a deficit of 20 points. There was little inspiration on offer throughout the region. Investors remain wary of the Chinese bourse after last week's weaker readings on activity; the Shanghai market ended the session lower by 0.2%.

 The weaker atmospherics surrounding China meant that the resource sector was still running into headwinds on Monday, posting the biggest sector decline for the day as Iron ore prices fell by 2.0% to USD90.10/t (CFR China. Fortescue Metals Group (FMG) was the worst of the bulk miners with a loss of 1.8%. As a group Energy stocks were the best gainers, led higher by Caltex (CTX). The reason for the improvement was a higher than expected first half dividend of 20 cents per share. A continuing focus on cost cutting saw CTX announce the cutting of 350 jobs on top of the 400 announced in 2012. CTX announced a half year net profit of $173m, up one per cent from $171m in the previous period. The shares were ahead by 7.4 per cent at the close.

 Spark Infrastructure (SKI) posted a 13.2 per cent increase in first half profit before interest on loan notes and tax, despite a decline in the volume of electricity carried through its networks in Victoria and South Australia. Profit before loan note interest and tax rose to $166.1 million, while net income climbed 17.1 per cent to $89 million. Operating cash flows rose 4 per cent. Spark has already provided guidance for distributions this year of 11.5¢ per security, up

4.5 per cent on 2013, and forecast growth in the 2015 distribution of 3-5 per cent. It said its declaration of an interim dividend of 5.75¢ per security was in line with that forecast. SKI is an infrastructure fund which invests in regulated electricity investments in Victoria and South Australia. SKI owns 49 per cent of the CitiPower and Powercor distribution networks in Victoria, and 49 per cent of the Power Networks business in South Australia. Additionally SKI holds an interest in gas pipeline owner DUET Group. The shares rose 0.5 per cent following the result; the stock has risen more than 10 per cent in the last 12 months.

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