Australian Stock Market Report –Afternoon December 30, 2014

Ships waiting to be loaded are seen near piles of iron ore and bucket-wheel reclaimers at the Fortescue loading dock located at Port Hedland, in the Pilbara region of Western Australia in this December 3, 2013 file photograph. REUTERS/David Gray/Files Reuters

 Australian shares extended their losses this afternoon to shed 1 per cent and wipe out a chunk of yesterday's 1.5 per cent surge.

 Fortescue Metals (FMG) was the biggest contributor to the ASX 200, rising by 0.7 per cent and adding 0.2pts to the index. The price of iron ore rose by 1.8 per cent last night to US$67.9/tonne; however has still halved in value this calendar year.

 Banking stocks failed to maintain early gains with all majors finishing modestly softer by close. Commonwealth Bank (CBA) hit an all-time record high of $86.65 in the first 15 minutes of trade this morning.

 Medibank Private (MPL) rose by 0.8 per cent to $2.41 and remains 20 per cent above its $2/share issue price for retail investors. MPL has now been listed for a little over a month and is valued at $6.6bn on the Australian sharemarket.

 No major stocks went ex-dividend today. Yesterday, Sydney Airport (SYD) shares slumped following it trading ex-dividend for its 12cps final distribution. SYD shares fell by another 1.2 per cent today.

 Volume remained light with only 986.5m shares traded worth $2.6bn. 336 stocks rose, 465 finished lower and 316 were unchanged.

 Asian markets were mostly weaker today, with shares in Japan and Hong Kong slumping by around 1 per cent. South Korea's KOSPI fell by 0.5 per cent while China's Shanghai Composite shed 1 per cent.

 Economic news scheduled for release tonight isn't of the market moving variety. In Europe, an update on Spain's CPI will be released at 7pm. CPI is likely to be down 0.7 per cent y/y. The results of a report on consumer sentiment will be released in the US at 2am AEDT. The market expects a rise in sentiment.

 Holidays will interrupt trade in the region tomorrow. The Australian sharemarket will close at 2.10pm AEDT rather than 4.10pm AEDT while markets in Hong Kong, New Zealand and Singapore will all close early. Markets in Japan, Thailand, Indonesia and the Philippines will be closed.

 China's HSBC Final Manufacturing PMI Index will be released tomorrow at 12.45pm AEDT. The market expects the index to remain below 50.0 at around 49.5. While this report can move markets - it is likely to have a muted impact due to investors remaining in holiday mode.

 The Australian dollar buys US$0.813, €0.669, £0.524 and ¥97.8. Our currency is a touch firmer than this time yesterday but remains near a 4.5 year low against the greenback.

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