Australian Stock Market Report – Afternoon December 8, 2014

 Australian shares kicked off the trading weak substantially firmer with the ASX 200 Index up 0.7 per cent and ending just shy of 5400pts. Local shares managed to rise by 0.4 per cent last week despite a tough start to the week.

 We received a firm lead from global markets on Friday with Wall Street ending at fresh record highs and European equities rising by as much as 3.5 per cent. Investors were encouraged by a much better than forecast US jobs report. There were 321,000 jobs created in the US last month; ~90,000 more than consensus.

 Qantas (QAN) shares surged 13.8 per cent after the flagship airline said it expects the first half of the financial year to be its best since 2010. QAN provided guidance of between $300-$350m in Underlying Profit over 1H15. It has credited the return to profitability to its $2bn Transformation Program and $30m in savings from lower fuel prices.

 Coca-Cola Amatil (CCL) shares fell 1.7 per cent, taking the slump this calendar year to more than 20 per cent. The bottling company said it will cut 260 jobs as part of its $100m cost cutting campaign. CCL maintained forecasts of a better second half to the financial year.

 Bradken (BKN) shares slipped 0.9 per cent to $4.49 after surging 36 per cent on Friday. The capital goods provider to the mining sector said it received a $5.10/share bid valuing BKN at around A$872m.

 Mining and energy stocks eased slightly following a slump in commodity prices on Friday. BHP Billiton (BHP) fell 1 per cent, Rio Tinto (RIO) was flat and Fortescue (FMG) slipped by 0.75 per cent. Banks led the market higher today with the big four up by as much as 2 per cent and accounting for 15.5pts of the ASX 200's 37pt rise.

 Volume was significant with 1.7bn shares traded worth $5.3bn. 456 stocks rose, 477 fell and 338 finished unchanged. Traded volume in Medibank (MPL) shares spiked at the close this afternoon. The Australian dollar buys US$0.828, €0.673 and ¥100.6.

 On the economic front, the number of jobs advertised in Australia rose for the sixth month; up 0.7 per cent in November and is 8.9 per cent higher over the year to a fresh 20-month high.

 Petrol prices at the pump fell 3.8c/litre to a near 30-month low of 136.2c last week. With the domestic wholesale (terminal gate) price sitting at a 4-year low, further falls in petrol prices are likely.

 China's trade surplus of US$54.5bn in Nov was bigger than the market expected. Imports slumped by a surprising 6.7 per cent while exports were 4.7 per cent higher than a year ago. CommSec Economist Savanth Sebastian said "The softness in the Chinese property sector is keeping a lid on domestic economic conditions."

 Tonight will be quiet on the US economic front with no major data scheduled for release. European Union finance ministers are due to meet at the Eurogroup meetings in Brussels tonight. German industrial production and the Sentix investor confidence survey results will both be issued tonight.

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