Australian Stock Market Report – Afternoon September 12, 2014

Stock market indices — A pedestrian holding her mobile phone looks at an electronic board showing graphs of various countries' stock market indices outside a brokerage in Tokyo July 22, 2014. Reuters

ASX sheds 1.2% for the week

 In a picture that was much like Thursday, sellers continued to push the ASX 200 lower over the course of the afternoon. Initially the area around 5520 for the index provided some modest support, although by mid-afternoon the area gave way and new lows were plumbed. Counter intuitively, the Materials sector was the sub index that performed the best over the last session of the week. The improvement was a combination of seller's fatigue and the anticipation of a lower Aussie dollar, which would make commodity exports cheaper to foreign buyers in local currency terms. This premise was at least enough to check the momentum of selling for the bulk miners even though iron ore prices have fallen for 5 consecutive weeks.

 Elsewhere in the mining space nickel miner Western Areas (WSA) gave back some of its recent gains. Nickel prices continued to fall on easing deficit concerns, after members from the Philippines' government signalled that any reform to the country's mining laws, including a potential mineral ore export ban, could be some time away. The Philippines accounts for nearly all of China's nickel ore and concentrate imports and suggestions of a ban had resulted in a spike in nickel prices recently. WSA shares ended the day down 17 cents or 3.3 per cent at $4.91.

 Energy stocks ran into headwinds on Friday after the International Energy Agency (IEA) lowered consumption forecasts as growth slows in China and Europe. The group estimates that oil consumption growth in the June quarter slowed to a 2½-year low, with Saudi Arabian crude oil exports at their lowest levels since September 2011. Oilsearch (OSH) finished at $9.17 a loss of 11 cents or -1.2 per cent

 QBE Insurance (QBE) stood out in a falling market as investors weigh the prospect of a rising US dollar andpotentially higher US interest rates and the positive impact QBE's bottom line. The stock has risen 4.2% this week against a decline of 1.2 per cent for the overall market.

 Banks saw little benefit from better data on lending. Total lending finance rose by 2.2 per cent in July after surging by 7.4 per cent in June, supported by an ongoing lift in business lending. Total new lending in July was $74.5 billion - the highest since January 2008. Westpac (WBC) and ANZ each fell in the range of 1 per cent.

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