Australian Stock Market Report – Midday November 21, 2014

Asian stock market — Pedestrians look at an electronic board showing the stock market indices of various countries outside a brokerage in Tokyo June 25, 2014. Asian shares were on the back foot early on Wednesday, taking their cue from Wall Street as the deepening crisis in Iraq and a report that the U.S. could be loosening restrictions on crude exports triggered a rally in oil prices. REUTERS/Yuya Shino (JAPAN - Tags: BUSINESS)

 Australian shares are losing ground for the fifth day and remain only modestly above the 5300pt level. The ASX 200 Index is down by 0.1 per cent at lunch and takes the losses to 2.6 per cent this week. Should nothing change this afternoon this will be the worst week for local shares since June 2013.

 Global shares ended mostly firmer overnight with US stocks closing at fresh record highs. This was despite signs that manufacturing industries in both Europe and the US are growing at a slower than expected pace. The number of Americans filing for jobless benefits has remained below 300,000 for the tenth week and home sales rose more than anticipated last month.

 Mining and energy companies are the lone improvers today with the price of iron ore not falling further overnight. BHP Billiton (BHP) is up 0.75 per cent while the smaller and less diversified Rio Tinto (RIO) is adding 0.9 per cent. Australia's third largest iron ore miner Fortescue Metals (FMG) is up 3.4 per cent.

 Myer (MYR) is up 0.3 per cent and holds its Annual General Meeting (AGM) today. Myer Chairman Paul McClintock has again raised his concerns with GST exemptions for offshore businesses. Quarterly sales results out last week were sluggish. The department store operator has slumped by 38 per cent on the market so far this calendar year.

 Billabong (BBG) is up 5.4 per cent and seems optimistic about its future in the Americas division. Sales in Canada and Brazil have slumped by double digits compared to last year however and BBG expects the weakness to continue for the rest of the half before picking up in 2H15. BBG still remains in the early stages of its planned turnaround and restructure. BBG shares have surged by 47 per cent this calendar year but are worth 11 times less now than six years ago.

 Kathmandu (KMD) is down 5.2 per cent after saying that 1H15 profit will be lower than this time last year. The result would be helped by a strong Christmas trade period.

 The Australian dollar buys US$0.862, £0.549, €0.687 and ¥101.7.

 No major economic news is scheduled for release in Australia or the region today. Later this evening European Central Bank President Mario Draghi will deliver a talk.

 Volume is relatively average with 951.5m shares traded worth $2.1bn. 382 stocks are up, 416 are down and 300 are unchanged.

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