Australian Stock Market Report – Afternoon December 10, 2014

A woman walks past a stock quotation board outside a brokerage in Tokyo September 2, 2013. Asian shares climbed to a two-week high on Monday, and the Australian dollar and copper gained, as China said its manufacturing expanded in August at the fastest pace in more than a year. REUTERS/Toru Hanai (JAPAN - Tags: BUSINESS)

 The second half of Wednesday's session saw buyers make some pact on the market, taking advantage of prices that were discounted over the course of the morning. The ASX 200 bottomed out late this morning when it was down by 60 points. By the end of trade this deficit had been wound in and the index ended with a loss of 23 points or 0.45%

 The difference that allowed the market to turn around from session lows came down to the resource sector. At lunchtime the group was attempting to get traction and in the early afternoon this initiative succeeded, led by gains for BHP Billiton (BHP) whose shares rose to $29.39 a gain of 51 cents or 1.7 and supplemented by Rio Tinto (RIO) which ended at $56.40 a gain of 90 cents or 1.6%. While miners moved ahead, energy stocks remained by and large in the red. Santos (STO) gave up an early improvement to close $7.63 down 7 cents or 0.9%

 In company news, energy infrastructure group APA Group (APA) announced the purchase of Queensland's QCLNG pipeline for $5.41 billion. APA will launch $1.839 billion capital raising to assist in the purchase of the pipeline which connects gas fields in the Surat Basin to the QCLNG project on Curtis Island near Gladstone. The balance of the transaction will be funded by a $US4.1 billion debt facility. Additionally APA highlighted that it was on track to full year pre-tax earnings guidance of between $1.17 billion and $1.19 billion, excluding the impact of the pipeline acquisition. Management sees the acquisition as an avenue to leverage Queensland's growing LNG sector which will become a major exporter in 2015. APA shares were in a trading halt on Wednesday as the group conducted the share placement.

 Elsewhere in the energy space AGL Energy (AGK) announced that it will mothball half of its Torrens Island power station in Adelaide due to weak demand. Four of the eight generating units at the natural gas fired power station will be mothballed in 2017 reflecting the current market outlook, although AGK said the decision could be reviewed if conditions changed. AGK shares ended at $12.91 a loss of 30 cents or 2.2%

 Vacuum cleaner retailer Godfreys Group (GFW) made its share market debut which was marked by solid support. Godfreys shares commenced trade at $2.88 at 12:00 Sydney time well above the $2.75 investors paid in the company's initial public offering which raised $75 million. At the closing price of $2.85 the company a market capitalisation of almost $115 million. Godfreys has 209 stores across Australia and New Zealand and was founded during the Depression in 1931 by Godfrey Cohen, who sold vacuum cleaners in his father's furniture shop. The funds raised from the market listing will fund continued expansion as Godfreys expects its market will experience long term growth as the number of Australian households increases by an estimated 38 per cent between 2010 and 2031.

 Consumer confidence figures added to the negative mood of the day. The Westpac - Melbourne Institute Consumer Sentiment Index fell by 5.7 per cent to 91.1 in December the lowest level since August 2011. The result overshadows the rise of 1.9 per cent seen in November. The survey revealed worrying implications for retailers ahead of the Christmas shopping period. The sub-index tracking assessments of 'time to buy a major household item' fell 11.8% from 124.2 to 109.6. It is now 21.4% below its level of a year ago and has reached its lowest level since April 2009. Elsewhere in the survey the index tracking assessments of 'time to buy a dwelling' fell 10.8% and is now down 19.3% over the year to the weakest level since November 2010. As a result retailers were noted underperformers Harvey Norman (HVN) shares were at $3.43 down 17 cents or 4.7% after going ex-dividend, while Premier Investments (PMV) shares were at $10.27 down 41 cents or 3.8%.

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