Australian Stock Market Report – Afternoon June 24, 2014

EVENING REPORT
(4.30pm AEST)

The Australian sharemarket erased around half of Monday's improvements, dragged lower by US weakness. The All Ordinaries Index (XAO) finished 0.3 per cent softer, with the major banks the worst performers. Improvements amongst the industrials and property trusts were short lived today and all sectors ended in the red.

Westfield Retail Trust (WRT) rose by 0.92 per cent and the larger Westfield Group (WDC) slipped 0.37 per cent. Tomorrow the recently voted on restructure of the shopping mall owners becomes a reality on the market. Scentre Group is scheduled to make its market debut under deferred settlement until 3rd July. This means that funds will not exchange hands until the start of July. Scentre will hold its Australian and New Zealand assets. Westfield Corp will be its other business and will hold its better performing foreign assets in the U.S., the UK and Europe. WDC is up 8 per cent this calendar year and WRT is up 11 per cent.

The retailers demanded significant attention today, with most of the big movers found within the sector. South Africa's Woolworths confirmed its $213m, $17/shares takeover bid for Country Road (CTY). Woolworths already owns 87 per cent of the business. One of the conditions of the offer is that its acquisition of upmarket department store owner David Jones (DJS) also goes ahead. CTY surged by 17 per cent, while DJS rose 3.96 per cent. Adventure retailer Kathmandu (KMD) slumped 12.05 per cent following a 10-15 per cent reduction in its annual profit forecasts.

The major banks finished firmly lower this afternoon, wiping out 9.2pts from the All Ordinaries Index (XAO). ANZ Banking Group (ANZ) was one of the biggest movers, slumping by 1.06 per cent. Mining stocks finished mixed, with Australia's largest iron ore miner, Rio Tinto (RIO) slipping by 0.78 per cent, while Fortescue (FMG) lost 0.68 per cent. Gold miners such as Newcrest Mining (NCM) were helped by a stronger gold price.

The Australian dollar remains close to a seven month high against the greenback, currently buying US94.1c. Better than expected signs for China's manufacturing sector helped lift shares and currencies on Monday.

By the close of trade, 1.86 billion shares changed hands worth $4.06 billion. 470 stocks finished higher, 572 lost ground and 434 were unchanged.

Looking ahead, much of the focus will be centred on U.S. data tonight and continued unrest in Iraq. Figures on home prices, home sales and consumer confidence will be most important.

Tomorrow, the Reserve Bank's Deputy Governor Philip Lowe moderates a panel on G20 challenges. The quarterly Resources and Energy report will also garner some attention. This report contains updated forecasts for the mining sector.