Australian Stock Market Report

Trading volumes continue to be light on the local market. The US and major European markets closed higher overnight. The London stock market and commodity market, The London Metals Exchange, recommenced trading after the holidays, with the FTSE 100 index finishing slightly lower but base metal market mostly stronger. The All Ordinaries Index (XAO) is currently up 15points to 4,886.9, much better than was expected prior to the open of trade.

Financial stocks are having another very quiet day. Shares in the National Australia Bank (NAB) the best performer of the big four banks up 0.17pct to $24.06 and Insurance provider Tower Australia Limited’s (TAL) flat today after its big run yesterday, where the stock rallied over 42%.

The mining and energy sector are where all the action is occurring today. Copper prices rallied to just off record highs overnight and the gold prices adding around US$6 an ounce. After the close of the markets yesterday Rio Tinto PLC (RIO) declared force majeure on production from four of its coal mines in Australia´s Bowen Basin following rain and flood condition across Queensland. This followed announcements from Macarthur Coal Limited (MCC), Aquila Resources Limited (AQA), and BHP Billiton (BHP) late last week. As well as the coal transport firm QR National Ltd (QRN) is Australia´s largest rail freight operator about the impact to their businesses. Rio shares were down in London trade off 1.3pct but surprisingly they have bucked the negativity and moved higher on our market today. RIO shares currently up 0.3pct to $85.74. And small cap coal miner Cockatoo Coal Limited (COK) said heavy rainfall and flooding in the Bowen Basin has stopped production at its Baralaba open pit coal mine, COK shares are now flat at $0.52 after falling early in trade. BHP is up 0.73pct to $45.78. Coal & Allied Industries Limited (CNA) that operations coal mines exclusively within the Hunter Valley in New South Wales is feeling the pain from the coal sell-down off 1pct.

Gold stocks are travelling higher again today after another lift in the gold price overnight. Australia’s largest gold miner Newcrest Mining Limited (NCM) has gained another 0.47pct to $40.99. Laos and Thai copper and gold producer PanAust Limited (PNA) shares up 4.7pct to $0.885 after announcing it raised its earnings guidance by up to 11pct after being able to deliver more quality ore than expected in December.

Energy stocks were generally flat, the price of crude oil still holding around US$91 a barrel. Shares in Santos (STO) up 0.38pct to $13.23 and Woodside Petroleum (WPL) are off 0.05pct to $42.78.

Telstra Corporation Limited (TLS) shares up 1cent to $2.78.

The Australian dollar hit a new 28year high this morning reaching US101.96c and is now holding around the US101.86c mark and just below €77.00c.

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