Australian Stock Market Report – Afternoon September 4, 2014

Banks and miners hold market back

 Despite closing 0.4 per cent softer this afternoon, the local sharemarket ate away at the more substantial 0.6 per cent low hit at 3.30pm (AEST). The banks accounted for around a third of the losses while weaker iron ore prices kept the miners under pressure.

 The banks fell by as much as 0.8 per cent while mining stocks BHP Billiton (BHP) and Rio Tinto (RIO) slipped by around 0.5 per cent. Iron ore prices are at 5-year lows. Online travel business Wotif.com (WTF) fell 4.6 per cent after the consumer watchdog questioned the $700m takeover offer by US travel business Expedia. WTF has still surged by 20 per cent since the offer was made in July this year.

 Consumer staples were the lone improvers helped by Wesfarmers (WES) which rose 0.3 per cent and Woolies (WOW) which rose 1 per cent. Yesterday, news that Coles will cut around 400 jobs at its Melbourne head office to reduce costs didn't unsettle investors.

 2.26bn shares were traded today, worth $4.36bn. 459 stocks improved, 521 ended in the red and 381 were unchanged.

 Markets in the region ended mostly weaker, taking the shine off some of Wednesday's strong improvements. Japan's Nikkei fell by 0.3 per cent, shares in Hong Kong fell by 0.2 per cent, Taiwan 0.25 per cent while stocks in Shanghai rose by 0.6 per cent. Japan's sharemarket is still close to a seven-year high and stocks in Hong Kong surged by 2.3 per cent yesterday on signs of an improving Chinese services industry. Autumn festivals across Asia will keep markets quiet next week. Markets in China, Taiwan, Hong Kong and South Korea will observe holidays.

 The world's biggest mobile phone maker Samsung unveiled four new products including a curved display phone and a virtual reality headset. The South Korean based business accounts for around 13 per cent of the Korean sharemarket. The 83 business which make up the Samsung brand account for a staggering ~13 per cent of all exports from South Korea!

 Tonight in Europe, both the Bank of England (BoE) and the European Central Bank (ECB) will be holding their monthly meetings. The BoE is expected to keep rates steady at 0.5 per cent (9pm AEST) while the ECB should keep rates at 0.15 per cent (9.45pm AEST). In the US, private sector job numbers for August will be released at 10.15pm (AEST) together with weekly jobless claims at 15 minutes later. FOMC (Federal Reserve) members Mester, Powell, Fisher and Kocherlakato will all be delivering talks tonight.

 Tomorrow night, the US non-farm payrolls (the most influential monthly jobs report) will be released and could set the tone for markets early next week. Economists are expecting the unemployment rate to dip to 6.1 per cent.

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