Australian Stock Market Report –Afternoon July 24, 2014

A trader watches a monitor displaying stocks on the floor of the New York Stock Exchange February 4, 2010. — A recently published study has identified specific coping behaviors through which stress exposure leads to the development of insomnia. Reuters

The Australian market closed higher again today boosted by the better than expected "Flash" Chinese manufacturing data for July. The HSBC China flash Purchasing Managers' Indexes (PMI) for July hit a 18month high up 52.0 boosted by new orders up from 50.7 points in June and better than the BLOOMBERG market survey expected of 51.0.

After a mixed night on the US market the Aussie market did lift but not by as much as we had expected. At the close of trade The All Ordinaries index was up 9.8 points today and the volume traded on the market was in line with recent activity with 2.2Billion shares changing hands for a total value of $3.95Billion.Today the banking sector came under pressure but the insurers had a great day. The mining sector was held back by the building materials sub index, and gold stocks.

Newcrest told the market today it had beaten its own gold and copper production targets for the year. But NCM warned it will be posting asset impairments in its next result from between $1.5 to $2.5Billion for FY14, when it reports next month. NCM share price fell on this news down over 6.8%., its biggest one day slide since the 20th of March 2014. Northern Star Resources Ltd (NST) fell during the session off over 4% at the close. Overnight the US$ gold prices eased, with the COMEX gold futures quote down again in Asia trade off by US$7 or 0.50% to US$1,300 per ounce.

Also in the mining sector Atlas Iron Limited (AGO) lifted after reporting its quarterly results. The output was strong and they did not release any FY guidance. The concern for Atlas investors next year will be cash flow which is currently, and is expected to stay, under pressure. AGO share price lifted by over 3.5%. Industrial and specialty chemical supplier, Orica Limited (ORI) lifted by 2.8% while OZ Minerals Limited (OZL) fell 2.27% to $4.73.

The US$ oil price also fell in Asian trade now down US$0.21 or 0.20% to US$102.90 a barrel. Drillsearch Energy (DLS) reported its quarterly production numbers today the result was better than expected and DLS's share price lifted during the day. DLS produced 0.82Million metric barrels of oil equivalent (mmboe) up 4% over the quarter largely due to strong oil production (up 2%) and a recovery in wet gas volumes (up 14%) after interruption to supply issues in 3Q14 due to outages at Moomba. DLS gave no formal FY15 guidance today but the company is expected to update the market at its corporate briefing on the 1st of August.

Today the insurance sector moved higher after Insurance Australia Group (IAG) upgraded its full year profit margin expectations to 18%-18.3% verses IAGs prior guidance of 14.5%-16.5%. IAG is confident or the list after the amount the company has paid out in natural peril expenses in the second half of the year was lower than expected. IAG also lifted its expectations for Gross Written Premium (GWP) up near 3% this lifted the share price higher up 2.15% to $6.17. This helped lift Suncorp Group Limited (SUN) and Commonwealth Bank of Australia (CBA) shares as well today. Suncorp up 1.5% to $14.04 and CBA added 0.5%.

Macquarie Group Limited (MQG) held its AGM today and the company also released its 1Q15 results. MQG told the market it expects its full-year profit in FY15 to be broadly in line with the previous year and said in the first quarter of FY15 its operating groups' contribution was down on the last quarter and this time last year. MQG did say that its funded balance sheet remains strong MQG's share price fell 2.87% to $59.51. and Ozforex Group Limited (OFX) off over 1.5% to $2.50.

AUD/USD rallied higher after the China July flash PMI increased to 52.0 points. This is more evidence that the Chinese economy is past the soft spot experienced in Q1 2014. The AUD/USD now at 0.9441 after hitting 0.9476.