Australian Stock Market Report – Afternoon September 11, 2014

Asian stock market — Pedestrians look at an electronic board showing the stock market indices of various countries outside a brokerage in Tokyo June 25, 2014. Asian shares were on the back foot early on Wednesday, taking their cue from Wall Street as the deepening crisis in Iraq and a report that the U.S. could be loosening restrictions on crude exports triggered a rally in oil prices. REUTERS/Yuya Shino (JAPAN - Tags: BUSINESS)

Stocks ease for second straight day

 The Australian sharemarket failed to recover this afternoon, with stocks falling for the second day. The All Ordinaries Index (XAO) slipped by 0.5 per cent adding to Wednesday's similar pullback. The IT sector was the only improver with share registry Computershare (CPU) rising by 1.4 per cent.

 Profit results disappointed the market today with both Myer (MYR) and Sigma Pharmaceuticals cutting their dividend payments to investors. MYR, Australia's biggest department store chain slumped by 12.96 per cent after posting a 23 per cent slump in FY14 net profit to $98.5m. The result was softer than hoped for by the market, sales were flat and the final dividend was reduced by 31 per cent to 5.5cps. SIP, the owner of pharmacies like Chemist King, Amcal and recently DDS ended 4.8 per cent softer after temporarily suspending its interim dividend despite a 37.5 per cent jump in net profit to $22.4m.

 QBE Insurance (QBE), one of the country's biggest insurance companies rose by 2.5 per cent thanks partly to the strengthening US dollar. QBE generates the majority of its earnings offshore and switched to USD reporting back in 2010. QBE is up 4.9 per centthis calendar year.

 The mining sector fell for the second day and has wiped out the 1 per cent improvement recorded on Tuesday. BHP Billiton (BHP) ended 0.84 per cent lower to $35.50; Rio Tinto (RIO) rose slightly and the smaller Fortescue Metals (FMG) slumped by 1.5 per cent. The big four banks held the market back, with Commonwealth Bank (CBA) the biggest drag - sliding by 1.1 per cent.

 By the close, 2.07bn shares were traded worth $5.19bn. 411 stocks rose, 533 in the red and 403 were unchanged.

 The Australian dollar is trading near the lowest level in six-months as the market is anticipating a less dovish tone by the US central bank at its monthly meeting next week.

 No major market moving data is scheduled for release in Europe or the US tonight. The ECB monthly bulletin is out at 6pm (AEST) while the monthly federal budget data is out later in the evening. The European Central Bank's monthly bulletin contains the statistical data used when the central bank makes its monthly interest rate decision.

 Looking ahead, credit and debit card lending data for July will be out tomorrow. Consumers are still conservative in their spending habits - preferring to use their own money rather than credit. Comprehensive lending data will also be released tomorrow for July. This includes housing, personal, business and lease loans. Overall lending is near 6.5 year highs thanks partly to a strong property lending market.

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