Australian Stock Market Report – Afternoon January 5, 2015

 Australian shares rose in the final 20 minutes of trade to end 0.3 per cent firmer in what was a choppy session. The ASX 200 Index was up by as much as 0.6 per cent at one stage today and was down by a little more than 0.1 per cent at its worst. Despite all holidays being behind us for major sharemarkets - volume is likely to remain light over the next fortnight.

 The energy sector remained the standout - improving by 1 per cent despite the slump in oil on Friday. Woodside Petroleum (WPL) rose by 0.5 per cent while Santos (STO) ended 0.8 per cent firmer.

 Mining stocks were mixed by the close, with stellar gains of 11 per cent for junior iron ore miner Atlas Iron (AGO) and modest weakness for the much larger BHP Billiton (BHP). AGO shares slumped by 85 per cent in 2014 due to the 47 per cent slump in the ore price. Gold stocks like Newcrest Mining (NCM) also contributed to the sector.

 Lynas Corp (LYC) slumped by 5.5 per cent today and was one of the hardest hit stocks on the ASX 200. The rare earth minerals company has shed 97 per cent of its value since 2010. A lack of cash and China's dominance on the industry has made conditions challenging for LYC.

 QBE Insurance (QBE) released its 2015 calendar today and expects to release its FY14 earnings on 24 February. QBE will trade ex-dividend on 4 March, holds its AGM on 2 April and pay out its dividend on 13 April. QBE shares fell by 2.6 per cent last year and edged higher by just 0.5 per cent today.

 Volume remained light as expected with only 1.1bn shares traded worth $2.7bn. 493 stocks rose, 373 fell and 337 finished unchanged. The first few weeks of a new calendar year tend to be quiet with investors still in holiday mode.

 The Australian dollar is hovering around the lowest levels in more than 4.5 years buying US$0.806, €0.675, £0.527 and ¥97.1.

 Economic reports scheduled for release tonight are generally not significant market movers. In Europe however reports on German inflation, Spanish unemployment and EU investor confidence will still demand some attention from economists. In the US, December vehicle sales will be released. This includes the number of cars and trucks sold last month and is tipped to be near 17m.

 This week locally data on building approvals, retail spending and trade will be in focus. Volume is likely to be light. Across the region this week, data on Chinese trade and inflation will be highlights.

 In Europe this week an update on unemployment will gain some traction. The market expects the EZ's (euro zone) jobless rate to remain around 11.5 per cent.

 In the US, this Friday's non-farm payrolls will be most important. The market expects the creation of around 240,000 jobs in December and a jobless rate around 5.7 per cent. A stronger than expected result should see the US dollar strengthen further on rate hike expectations.

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