Australian Stock Market Report – Midday 3/14/14

MID-SESSION REPORT
(12.20pm AEDT)

It was no surprise to see local stocks under pressure from the outset on Friday. One of the main talking points in the last day has been the latest round of Chinese economic news, which was released after the close of Australian trade on Thursday afternoon. The Chinese figures had the capacity to be a boon or a bane. The much weaker than expected results have meant the latter. As a result sellers returned to commodity markets, base metals finished mostly lower on demand concerns after China's industrial production and fixed asset investment grew well below forecasts for the first two months of 2014. The bulk miners resumed the downward trend seen earlier in the week.

The price of gold has risen in response to the weaker tone of the markets, in addition to safe-haven demand from escalating tensions in the Ukraine. Gold stocks were amongst the few improvers in early trade. Alacer Gold (AQG) shares were up by 5 per cent or 17 cents at $3.56. Newcrest Mining (NCM) was up by 9 cents or 0.7 per cent at $12.44

Recent days have seen no shortage of headlines in relation to Leighton Holdings (LEI). Friday has been no different with reports suggesting that significant write downs have been a consideration for the LEI board for some time. Shares in the building contractor were down by 2.8 per cent or 62 cent at $21.27

Staying on the theme of construction, shares in Adelaide Brighton (ABC) fell heavily in the wake of a profit warning. The cement maker said that it could lose up to $15 million in pre-tax profit when Cement Australia, a key customer for ABC, elects to build its own facilities to supply cement in South Australia. ABC said that due to the uncertainty regarding the time required to construct the facilities, the exact timing of the changes to the customer's cement requirements are unknown at present. ABC shares were down 7.4% or 32 cents at $4.02

ABS figures showed that business finance lifted 3% to $39.85bn in January, compared with $38.68 billion in December. Commercial lending in trend terms is at its highest level since December 2007. Personal lending eased 0.3% in trend terms to $8.09bn in January compared to $8.11billion in the previous month.