Australian Stock Market Report – Afternoon January 8, 2015

Asian stock market — Pedestrians look at an electronic board showing the stock market indices of various countries outside a brokerage in Tokyo June 25, 2014. Asian shares were on the back foot early on Wednesday, taking their cue from Wall Street as the deepening crisis in Iraq and a report that the U.S. could be loosening restrictions on crude exports triggered a rally in oil prices. REUTERS/Yuya Shino (JAPAN - Tags: BUSINESS)

 Australian shares finished firmer for the second time this week following 1.2 per cent gains in US markets and a firmer oil price. The ASX 200 Index rose by 0.5 per cent but is still down so far this week.

 Mining stocks improved with some exceptions. BHP Billiton (BHP) rose by 0.9 per cent while gold stocks gave back some of this week's gains. Iron ore and steel company Arrium (ARI) surged by 15.5 per cent despite no news and continues to be volatile. ARI shares rose by 16 per cent on Wednesday, fell by 85 per cent in 2014 and surged by 92 per cent in 2013.

 Paladin Energy (PDN) fell by 3.9 per cent after the uranium miner warned of storm damage at its mine in northern Malawi. The Republic of Malawi is located in southeast Africa and is bordered by Tanzania, Mozambique and Zambia.

 Qantas (QAN) shares fell by 0.8 per cent today. The airline's biggest shareholder 'Franklin Resources' has reduced its stake in QAN from 15.4 per cent to 14.22 per cent. QAN shares have doubled in value in six months.

 The four major banks improved by as much as 0.9 per cent today; adding 7.2pts to the ASX 200 and accounting for a quarter of the market's gains.

 Volume remained a touch light with 1.3bn shares traded worth $4.1bn. 460 stocks rose, 415 fell and 315 unchanged.

 Home building activity remains healthy in Australia. The November release of building approvals was better than expected with new dwelling approvals rising by 7.5 per cent. Council approvals to developers were most significant for the construction of apartments (+16.7%). Approvals hit record highs in Victoria in seasonally adjusted terms. CommSec's Chief Economist Craig James said that "It is clear that the Australian economy has started 2015 with plenty of promise. The Aussie dollar has fallen, boosting the outlook for Corporate

Australia. The sharp fall in the petrol price has put spending power in Aussie consumer pockets."

 Commonwealth Bank (CBA) has updated its view on interest rates this year. Australia's biggest listed company now considers it 'quite likely' the RBA will not touch interest rates over 2015. The major banks are now mixed in their views with Westpac (WBC) and National Bank (NAB) expecting two rate cuts this year while ANZ Banking Group (ANZ) currently considers two rate hikes as most likely.

 Tonight will be busy in Europe with plenty of data scheduled for release. In Europe, retail sales and German factory orders will be in focus together with the Bank of England's interest rate meeting at 11pm AEDT.

 In the US a monthly report on job layoffs in December will be published. The American employment story continues to improve. Weekly jobless claims will be out at 12.30am AEDT and is expected to print at 291,000. This is a measure of how many Americans filed to receive jobless benefits for the first time last week.

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