Australian Stock Market Report - Closing 4/2/2011
The Aussie market finished higher for the third straight day today with the All Ordinaries index (XAO) rising 0.8 pct or 39.5 pts to 4958.8. Almost all sectors finished higher with and the market closing just shy of 5000pts, a level not reached in almost a year. The Australian market has gained close to 2 pct over the week.
Food distributor and marketer, Metcash (MTS) gained 0.96 pct or 4 cents to $4.19 after it secured a deal to supply 230 7-Eleven convenience stores. The deal is expected to add an extra $140 million in annual revenue to MTS.
Australia's largest miner, BHP Billiton (BHP) is continuing with its US$12 billion potash project in Canada's Saskatchewan province. The company is expected to conduct a feasibility study for what could become one of the world's premier potash mines. BHP shares finished 0.76 pct or 35 cents higher to $46.67.
Australian gambling and entertainment company, Tabcorp (TAH) announced a $265.5 million first-half profit and TAH rose 3.09 pct or 22 cents to $7.33.
Global media company, News Corp (NWS) finished 2.52 pct or 44 cents higher to $17.88, continuing to gain after posting solid quarterly results on Thursday.
There has been speculation that state governments might not receive their share of $15 billion in federal funding if they do not accept national health reforms. The health care sector rose with the rest of the market today with barrier protection products company, Ansell (ANN) rising 2.68 pct or 36 cents to $13.80.
There were reports that Cyclone Yasi could cost Queensland's sugarcane business up to $500 million and also wiped out as much as 90 pct of the state's banana crops. The insurance sector had a great day today with QBE Insurance (QBE), leading the way. QBE shares rose 7.44 pct or $1.26 to $18.20. Insurance Australia (IAG), fell 0.53 pct or 2 cents to $3.73 and Suncorp (SUN) rose 1.3 pct or 11 cents to $8.56.
On the economic front, the Reserve Bank of Australia (RBA) released their statement on monetary policy. We're now expecting interest rates to remain unchanged until May. Commsec Economist, Savanth Sebastian said that "The latest Monetary Policy statement highlights the Reserve Banks thinking on the impact of the recent natural disasters. The floods across three states, softer-than expected economic data and the latest cyclone have resulted in a profound downgrade on near term growth prospects for the Australian economy."
Mr Sebastian went on to say that "While near term growth looks subdued, the Reserve Bank is certainly more optimistic about the second half of this year. The central bank believes that growth over the medium terms is likely to be spurred on by the considerable amount of rebuilding that will take place over the second half of 2011. In fact December 2011 growth forecasts have been upped by half a percent to 4.25 per cent. And despite robust growth the icing on the cake is that inflation will remain contained well into 2013."
Next week, job advertisement data, retail trade, consumer sentiment, employment numbers and the Reserve Bank Governor testimony will all be released over the next 5 sessions.
The number of shares traded came to 3.1 billion shares, worth $6.3 billion. 723 shares were up, 448 finished weaker and 383 ended unchanged. At 4.30pm AEDT on the Sydney Futures Exchange, the Share Price Index futures contract (SPI) fell 0.02 pct or 1 pt to 4843.
Dow Jones futures are pointing to a slightly weaker start to U.S trade. North American markets will open at 1.30am (AEDT) and close at 8am (AEDT).
On the earnings front out of the U.S, provider of risk management services, AON Corporation will be reporting prior to the market open.
Several Asian markets did not trade today due to the Chinese New Year holiday. Japan was the only major Asian market to trade today and finished slightly off with the Nikkei 225 up 1.08 pct or 112.16 pts to 10543.52.
In the US, non-farm payrolls are released.
Have a great weekend.