Australian Stock Market Report – Afternoon September 24, 2014

An office worker is reflected in the window of the Australian Securities Exchange building displaying the ASX50 curve for Wednesday in central Sydney August 7, 2013. Australian shares skidded 1.3 percent on Wednesday, its biggest fall in five weeks, hit by sharp falls in miners and financials as regional markets tracked a soft Wall Street lead amid uncertainty about the U.S. Federal Reserve's stimulus programme REUTERS/Daniel Munoz (AUSTRALIA - Tags: BUSINESS)

And back down we go...

 Most of the vim and vigour for the local market was seen within the first few hours of trade today. During this time sellers trampled on the gains of yesterday and for the remainder of the session the market ebbed and flowed within sight of the lows of the session. The tone of the session deteriorated after a late push was made by sellers which succeeded in pushing the market to new lows for the day. The ASX 200 after trading at 5378.3points at midday closed the session slightly lower by 0.7 of a per cent to 5.375.8 points.

 The news highlight for the day was the RBA releasing the Financial Stability Review (FSR) a semi-annual review of the state of the domestic financial system. The document included a discussion about the composition of housing and mortgage markets at present, which has been heavily influenced by investors. The RBA revealed that it is in discussions with APRA, ASIC and the Federal Treasury about "additional steps that might be taken to reinforce sound lending practices by financial institutions in general but particularly for investor lending". Despite highlighting lending risks that relate to the housing sector, the FSR more generally paints an ongoing positive picture of the Australian financial and banking system and the continued solid underlying fundamentals. On the back of the review we saw banking and property stocks both close down within the range of 1 per cent.

 In company news, Fletcher Building Limited (FBU) announced that it would be ceasing operations at its Sydney based factory due to a mix of international competition and a general decrease in demand for copper tubing. The closure of their Crane Copper Tube factory in Penrith will see the loss of 108jobs. The market in FBU reacted negatively to the news today, the shares ending the day down by 2.56 per cent at $7.98.

 Furthermore, Today the Bureau of Resources and Energy Economics (BREE) concluded that they expect the recent descent of iron ore demand, Australia's biggest export, to continue. Iron ore is currently trading down almost 40 per cent since the beginning of this year, to less than US$80 per tonne on the back of sluggish demand from China and a weaker Aussie dollar. BREE expects the commodity to average $US94 per tonne in 2014, a drop of 26% from the average in 2013. The Australian exports figure is expected to feel the effects of this in the form of a 1.4 per cent drop in earnings this year.

 The Aussie dollar closed at a low of US$0.8872 today. Volumes traded on the market were in the range of 2.1 billion today, totalling $4.7 billion. The session saw 295 stocks end the day higher while 632 closed in the red.

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