Australian Stock Market Report - Closing

Local stocks closed flat on the first trading day of 2011, under-performing US stocks which rose to fresh two year highs during Monday’s session. Worries about how our insurers will deal with the fallout arising from the Queensland floods saw insurance and banking stocks drag. The All Ordinaries Index (XAO) added 2.6pts or to 4849.5 while the S&P/ASX 200 Index (XJO) eased by 2.7pts to 4742.5.

The financial sector eased by 0.5pct with three out of the big four closing in the red. The Commonwealth Bank (CBA) was the worst performer, down 0.6pct to $50.47 while shares in the NAB (NAB) increased by 0.6pct to $23.84.

Among the insurers, shares in Suncorp-Metway (SUNDA) eased 3pct to $8.35 as the company traded under a deferred settlement. Shares in QBE Insurance (QBE) dropped 2.1pct to $17.77 while IAG Insurance (IAG) was off 1.6pct to $3.82.

Mining stocks performed better. BHP Billiton (BHP) added 0.4pct to $45.45 while Rio Tinto (RIO) added 0.4pct to $85.80.

The energy sector added 0.5pct with crude oil trading at 27 month highs above US$91.50 a barrel.

Consumer staple and discretionary stocks eased, with Woolworths (WOW) down 1.3pct to $26.63 and David Jones (DJS) weaker by 1.1pct to $4.41.

The national average terminal gate or wholesale price of petrol currently stands at a 26-month high of 124.2 cents a litre. Fortunately for motorists, increased competition has seen oil companies holding back on passing on the added increase over the holiday period. In fact pump prices have actually fallen over the past week due to a breakdown in the discounting cycle.

The Performance of Manufacturing index eased from 47.6 to 46.3 in December, a 1 year low. Any reading above 50 means the manufacturing sector is expanding. Key sub-indexes were mostly weak with new orders, production and exports still contracting.

The Australian dollar ended the trading day weaker against all the major currencies. At 4.30pm AEDT the Aussie was worth US101.00c, £0.6523 and €75.64c.

On the market overall, a total of 2.6 billion shares were traded, worth $3.92 billion. 642 were up, 516 were down and 366 were unchanged.

At 4.15pm AEDT on the ASX24, the futures contract was at 4734, up 4pts.

Ahead tonight, auto sales and factory orders data are scheduled for release in the US.