Australian Stock Market Report – Afternoon November 6, 2014

A pedestrian talking on his phone is reflected in the window of the Australian Securities Exchange as an investor watches boards displaying stock prices in central Sydney October 16, 2014. Australian shares slid 1.1 percent on Thursday after U.S. stocks lost ground as investors continued to fret about global growth, though a recovery among gold producers prevented steeper losses. REUTERS/David Gray (AUSTRALIA - Tags: BUSINESS)

Miners and Banks weigh on ASX 200

 The local sharemarket continued its downward slide this afternoon, closing firmly in the red. The All Ordinaries Index (XAO) lost 0.32 per cent or 17pts to 5,475, while the S&P/ASX 200 slipped 0.29 per cent or 16 pts to 5,501. The market was weighed down by falls in the mining and financial sectors. Volumes saw 1.9 billion shares exchanged worth $5.3 billion. 386 stocks ended higher, 571 closed lower and 321 were unchanged.

 The materials sector fell 0.45 per cent. Fortescue Metals (FMG) shares dropped 8.46 per cent to $3.03 after the price of Iron ore dipped to a five-year low of US$76.00 a tonne overnight. BHP Billiton (BHP) eased by 0.12 per cent to $33.78, while Rio Tinto (RIO) dipped by 0.27 per cent to $60.00.

 The banks also retreated. ANZ Bank (ANZ) slipped 0.56 per cent to $33.60, while Westpac Bank (WBC) fell 0.52 per cent to $34.41.

 Ten Network Holdings (TEN) announced the appointment of Citigroup as an adviser in acknowledging reports that it could become subject to a takeover bid. Press reports in the last day have suggested that US cable television company Discovery Communications and Australia's Foxtel were considering a joint bid for Ten. Foxtel is half-owned by News Corp (NWS). TEN shares ended the session with a 7 per cent gain to $0.23.

 UGL (UGL) shares plunged 14.6 per cent to $5.89 after the firm warned of a near $200 million cost blow-out on a power station it is building on the Ichthys LNG project in the Northern Territory in a joint venture with US engineering group CH2M Hill.

 In economic news, employment rose by a better than expect 24,100 in October beating forecasts of a rise of 10,000 jobs. Full-time jobs rose by 33,400, while part-time jobs fell by 9,400. The unemployment rate remained at 6.2 per cent while the participation rate rose from 64.5 per cent to 64.6 per cent. Monthly jobs data has always been volatile, but even more so in recent times. Additionally there have been questions raised in relation the methodology used by the ABS. To this participant took today's data with a grain of salt, paying more attention to the trend estimates and then view the data against the backdrop of other statistical and survey evidence on the economy. In trend terms jobs are rising by around 1-2,000 a month, well short of the 16,000 jobs growth required on a monthly basis to keep the unemployment rate steady.

 The Australia dollar received a boost from those better than expected jobs numbers, recovering slightly from fresh four year lows. It's fetching 86 US cents.

 Ahead tonight in the US, data on weekly claims for unemployment insurance and Challenger job layoffs and labour cost/productivity estimates will be released. The European Central Bank and the Bank of England will hold monthly policy meetings this evening. Interest rates are expected to remain on hold.

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