Australian Stock Market Report – Afternoon October 20, 2014

 Australian stocks maintained earlier gains to close higher for the fifth consecutive trading session. Gains in excess of 1 per cent for the miners, banks, industrials, consumer discretionary and property trusts pushed the market higher. The All Ordinaries Index (XAO) improved by 0.9 per cent or 47.2pts to 5307.3.

 Mining stocks improved for the first time since last Wednesday. Iron ore and steel producer Arrium (ARI) rose 0.75 per cent after posting a 20 per cent jump in the amount of ore mined last quarter. ARI shipped 3.45Mt of ore between July-September. BHP rose 1.3 per cent ahead of its quarterly production report this Wednesday. Australia's largest gold miner Newcrest (NCM) will release its quarterly tomorrow and slumped by 1.9 per cent today.

 Banks added to last week's near 2 per cent surge with the four majors up by as much as 1.6 per cent. National Bank (NAB), Commonwealth (CBA), Westpac (WBC) and ANZ Banking Group (ANZ) all have dividend yields in excess of 5 per cent.

 Ten Network (TEN) shares extended their gains to 7.3 per cent by the close following speculation of merger talks with Fairfax (FXJ). TEN posted a near $170m loss for FY14 last week. FXJshares rose by 3.2 per cent.

 Volume remained light with only 1.6bn shares traded worth $3.7bn. 571 stocks rose, 351 lost ground and 395 were flat.

 Petrol prices at the pump in capital cities rose last week despite a fall in wholesale prices. The 5.2 cents/litre rise in the pump price to 149.0 cents per litre might be short lived however. The jump in prices could be due to the discounting cycle; however could fall in coming weeks with the wholesale price at a 17-month low and the key Singapore gasoline price at a more than two year low. Singapore is a major hub for processing oil for the region.

 CommSec's State of the States report showed NSW sneaking into the top spot on economic performance last quarter. Strong population growth and a healthy property market have been two main drivers. Tonight, a member of the FOMC (US central bank's policy setting body) will deliver a talk at 1am AEDT. Germany's central bank will release its monthly report at 9pm AEDT.

 Looking ahead, tomorrow's Reserve Bank board minutes will be a highlight locally. The focus will be on the statement's language with particular interest on the strength of the housing market and the falling Australian dollar. The Annual General Meeting (AGM) season continues with Origin Energy, Super Retail Group, Bradken, BHP, AGL, Suncorp, Toll, Blackmores, Qantas, Paperlinx and Carsales.com some of the well-recognised names meeting investors this week.

 Globally this week, China will be in the spotlight with monthly updates on the health of its economy to be provided tomorrow.

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