Australian Stock Market Report (Closing)
The Australian market has finished off the week around 0.75pct weaker after the ASX 200 (XJO) index pulled back by 0.7pct or 31.7pts today.
We reacted to U.S market weakness today with almost all sectors finished in the red. The lone exception was the defensive health care sector with the S&P/ASX 200 Health Care index gaining 0.41pct or 33.9pts to 8335.1.
Australia's largest miner, BHP Billiton (BHP) said the US Federal Trade Commission granted early termination of the waiting period which was previously imposed for its attempt to purchase the world's largest fertiliser producer, Canadian based, Potash Corp (POT;cn). BHP shares fell 0.46pct or 18cents to $39.04.
The largest banks finished weaker today, extending falls in the second half of trade. National Australia Bank (NAB), was the worst performer losing 1.54pct or 40cents to $25.55 whilst the other 3 majors all lost around the 1pct mark.
The Australian Competition and Consumer Commission (ACCC) has penalised Cabcharge (CAB) for misuse of its market power and has been ordered to pay $15 million in penalties. CAB operates a nationwide charging facility for the payment of taxi fares without the use of cash. CAB shares rose 10.59pct or 57cents to $5.95 after the long running investigation into the company's activities by the ACCC has finally come to an end resulting in somewhat relieved investors.
On the economic front, financial accounts numbers were out today. The percentage of super funds/pension funds assets held in cash has risen to 15pct from 14.3pct. Commsec Economist, Savanth Sebastian said that "The rout on equity markets over the June quarter has clearly taken its toll on the wealth levels of Australian households. Financial wealth slumped by over 8 per cent to the lowest level in a year. The European debt crisis temporarily spooked markets earlier this year and resulted in the slide in equity markets. However the fall in wealth levels is likely to be temporary, especially given that equity markets are on track to post a 7-8 per cent gain in the September quarter. And as the recovery gains traction a sustained improvement in wealth levels should take place, supporting confidence, and in turn translate to an increase in spending and overall economic activity."
The Federal Budget deficit stood at $54.8 billion in 2009/2010 which was better than expected. It's important to note that treasury does have a tendency to be quite conservative with their estimates and forecasts. Commsec's Chief Economist, Craig James said that "Federal Treasury tends to under-estimate the budget outcome. And this is not a recent development - over the last eight years the budget result has come in better than expected. Treasury is a conservative body, but the forecast bias is pointed just one way. This suggests that Treasury will again prove too gloomy about estimates of economic growth and the budget position over the next year. It also raises doubts on Treasury views that Australia is bumping up against capacity limits. This point is worth noting given that the Treasury Secretary sits on
the Reserve Bank Board."
Next week is gearing up to be a jam packed one economically with a barrage of data released over the next 5 days. Mid week, population growth numbers for the March quarter will be released but it really is Thursday which is expected to be the busiest on the economic front. Job vacancies for August, building approvals, RP Data home prices, private sector credit, new home sales and performance of manufacturing are all expected for release on the 30th Sept.
The Australian dollar has gained throughout the day to currently buy US95.22c and still remains around 26 month highs.
Volume and value of shares trade picked up today following equity derivatives expiry yesterday. Volume of shares traded came in at 2.08 billion shares worth $6.95 billion. 414 shares were up, 612 finished weaker and 379 ended unchanged.
At 4.30pm AEST on the Sydney Futures Exchange, the Share Price Index futures contract (SPI) is down 0.02pct or 1pt to 4619.
Dow Jones futures are currently pointing to a slightly stronger start with a 0.2pct gain expected on the open.
In the US, data on durable goods orders and the number of new homes sold in August will be released.