Australian Stock Market Report – Afternoon September 29, 2014

An office worker talks on his phone as he looks the stock board at the Australian Securities Exchange (ASX) building in central Sydney June 15, 2012. Asian shares edged up on Friday, and the euro held most of the previous session's gains, as nervous investors took comfort from plans for coordinated action by major central banks to stabilise markets if Sunday's election in Greece results in turmoil. REUTERS/Daniel Munoz (AUSTRALIA - Tags: BUSINESS)

Despite late gains market ends in the red

 The second half of the trading session on Monday provided a little more cause for optimism compared to its earlier counterpart. Buyers finally found some resolve around lunchtime and the ASX 200 was able to recover a solid portion of the early losses. At the best levels of the session the market was down, The ASX200 ending the day down by 0.9 per cent at 5,264.2 points.

 The Consumer Discretionary sector was at the head of the field in terms of sectors losing ground on Monday. This week looms as an important one for the group ahead of retail trade data which will be released on Wednesday. Retail sales figures have been particularly encouraging in the last couple of months, having risen by 0.4 per cent in July after a 0.6 per cent increase in June. Annual spending growth is holding at a healthy rate of 5.9 per cent - well above the decade average of 4.3 per cent. A solid number could at least help the sector consolidate after recent weakness. Elsewhere, the Consumer Staples group saw Woolworths (WOW) and Wesfarmers (WES) lose ground by similar margins. With respect to Wesfarmers, Coles has been found guilty of falsely describing bread products as "freshly baked" and "baked today". The Federal court has been banned Coles from advertising that its bread was made or baked on the day it was sold for a period of 3 years. Federal Court ordered the super market to display the courts notice in its stores and on its website informing customers of the breach of Australian consumer law.

 Mining stocks in general were again being marked down in most commodities although one group to be spared the aggressive selling seen elsewhere was alumina producers. Alumina prices rose by 5.4% over the course of the last week to USD $358 per tonne on deficit concerns as China's bauxite stockpiles wind down and as aluminium output looks to grow faster in the second half of the year, Alumina Limited (AWC)today closed up 0.29 per cent to $1.75.

 Another market that remained under pressure over the course of the afternoon was the Aussie dollar which closed today at US$0.8699. The local currency followed the Kiwi dollar lower after the Reserve Bank of New Zealand said that it had sold down its net holdings of the local currency by more than half a billion New Zealand dollars in August. For some time the Kiwi central bank has referred to the elevated level of New Zealand dollar as being "unjustified and unsustainable." As a result the Aussie dollar was on the cusp of making new lows for the year, which in turn stymied the recovery for the ASX 200.

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