Australian Stock Market Report – Afternoon October 13, 2014

Traders work on the floor of the New York Stock Exchange July 17, 2014. U.S. stocks fell sharply lower on Thursday, with the S

Local stocks add to Friday's 2% slump

 The Australian market has slumped for the fifth time in six days and remains near an eight-month low. The All Ordinaries (XAO) slipped by 0.6 per cent and local stocks have shed 9.5 per cent from the highs reached at the start of September. The strength in the US dollar and recent concerns of sluggish world growth have been two drivers.

 US markets provided a weak lead for local shares with the tech focused NASDAQ slumping by 2.3 per cent and making it the worst week since May 2012. The European Central Bank (ECB) President Mario Draghi repeated his intention to expand the bank's balance sheet to support Europe's sluggish economy at the weekend. Europe's quarterly GDP result will be out this Friday night.

 Buyers took advantage of the heavily sold mining sector today, with gains from the larger players starting to erase part of last week's 3.3 per cent tumble. BHP Billiton (BHP) rose by 0.9 per cent, RioTinto (RIO) jumped by 1.9 per cent and Fortescue Metals (FMG) shot higher by 6.1 per cent. On Wednesday and Thursday Rio Tinto, Fortescue and Woodside release their quarterly production reports.

 Companies involved with the production of coal were hard hit following comments from China's Ministry of Finance last week outlining the government's intention to add import tariffs for coal starting Wednesday this week. Wesfarmers (WES) slumped 2 per cent, Aurizon (AZJ) fell by 3.2 per cent while Whitehaven Coal (WHC) ended flat. Note that WHC dropped by 13 per cent last week.

 Telstra (TLS) fell 0.95 per cent ahead of its Annual General Meeting (AGM) with investors tomorrow. Biopharmaceutical company CSL eased by 0.5 per cent and inner ear implant maker Cochlear (COH) fell by 0.6 per cent. Both businesses are holding AGMs with investors later this week. CSL is the largest company in the healthcare industry.

 All major markets across the region were pushed lower today with Shanghai's Composite down 1 per cent, Hong Kong's Hang Seng slipped 0.6 per cent, South Korea's KOSPI is down 0.85 per cent while Japan's markets were closed for a holiday.

 On the economic front data on lending and credit card debt were issued locally. Across the region data on Chinese trade was a highlight. A smaller than forecast US$30.9bn trade surplus was recorded in September, held back by a larger than expected 7 per cent jump in imports. There was no major reaction from Australian shares although the Australian dollar rose steadily for most of the day. Credit card debt fell back slightly in August while new lending slumped by 10.3 per cent; falling away from a 6.5 year high due to a 16 per cent slide in commercial/business loans.

 By the close, 1.74bn shares were traded worth $4.79bn. 284 stocks ended higher, 628 in the red and 372 unchanged. Tonight, Eurogroup and IMF meetings continue. Holidays will be observed in both the US and Canada although American markets will trade normally this evening.

 Looking ahead AGMs and production reports will be in focus over the next five days in Australia.

[Kick off your trading day with our newsletter]