Australian Stock Market Report – Midday September 30, 2014

IN PHOTO: Office workers are reflected as they walk past the Australian Securities Exchange building in central Sydney April 8, 2011. Singapore Exchange Ltd has terminated its $8 billion bid for Australia's ASX Ltd after the Australian government formally rejected the offer on national interest grounds and said changes to the country's financial systems were needed before the bourse could be bought by foreigners. REUTERS/Daniel Munoz

Sellers pause for breath

 The start to Tuesday's session on the ASX followed a familiar pattern of trade, in that sellers dominated once more. The initial plunge for the index saw a loss of 11 points at the low point of the morning. From the lowest ebb the market recovered to push back into positive territory, albeit rather briefly. A status quo was then established which saw the market pivot around the un-changed level in the late morning trade. The softer tone for the second session of the week was at least consistent with developments in European and US markets. This was a contrast with Monday when participants ignored gains in northern hemisphere stock markets.

Interestingly the pro-democracy rallies held in Hong Kong on Monday resonated with participants on both continents. In Europe shares in banks and luxury brands exposed to the consumer in Hong Kong fell most. US share markets eased but finished well off the day's lows with investors again keeping a wary eye on developments in Hong Kong.

 Notwithstanding the softer tone there has been evidence that buyers are taking advantage of recently discounted stocks. Gains for financials acted as ballast for the ASX 200 over the morning, although miners as a group were weaker following on from the theme seen in UK trade which saw general weakness for Australia's major miners.

 In company news Recall Holdings (REC) was one of the big movers over the morning. The group responded to press speculation regarding the potential acquisition of REC by Iron Mountain (NYSE: IRM). REC said that it doesn't comment on media speculation, although at the same time it confirmed that it was not in discussions with Iron Mountain or any other potential buyer. REC added that any material developments in the future, would see the company inform shareholders in keeping with its continuous disclosure obligations. REC shares were ahead by more than 8 per cent or 43 cents at $5.45.

 In economic news lending data was in focus this morning. The RBA's Private Sector Credit figures for August revealed that the value of loans rose at a slightly slower than expected pace. Total credit rose by 0.4 per cent, the same result that was seen in July. The average of economist's expectations was for an increase of 0.5 per cent for the month. In the 12 months to August, total credit rose by 5.1 per cent, which again was just below forecasts of 5.2 per cent increase. The figures highlight that outside lending to housing investors demand for credit is growing at a modest pace.

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