MARKET CLOSE (4.30pm AEDT)
It seemed that investors stayed well away from the Australian
sharemarket today ahead of further clarification on a number of
topics from the Eurozone and particularly Greece over the next
few days. The All Ordinaries index (XAO) fell by 0.2 pct or 7.2
pts to 4335.3.
It certainly has been a wild ride so far in 2011, with the XAO
rising by around 1.5 pct between January and March, only to lose
around 19 pct between April and September, then gain by around 7
pct in October and is remaining volatile in the early part of
The miners and financials both lost a little ground and held
the broader market back. The financial sector makes up around 38
pct of the ASX 200 index while the mining sector accounts for
more than 25 pct.
The world's third largest diversified miner, RIO Tinto (
) fell 1.67 pct or $1.17 to $68.80 while the larger BHP Billiton
) lost 0.66 pct or 25 cents to $37.70.
The big banks ended mixed, with ANZ Banking Group (ANZ) rising
by 0.81 pct or 17 cents to $21.19 ahead of its ex-dividend date
on Thursday, Commonwealth Bank of Australia (
) improved by around 0.5 pct ahead of its Annual General Meeting
scheduled to be held tomorrow, Westpac (
) fell by 4.4 pct after going ex-dividend today while National
Australia Bank (NAB) ended largely flat.
It was not all bad news today however with some impressive
gains being recorded by both Computershare (CPU) and Orica (
). CPU is the world's largest share registry and rose by over 15
pct after receiving the nod of approval from U.S regulators to
takeover BNY Mellon's share registry business.
Chemicals and explosives manufacturer ORI rose by around 4.5
pct after posting a $642 million profit and declaring a 53 cent a
share dividend. This was broadly in line with what the market was
On the economic front today, the latest report on job
advertisements was released and showed that the number of jobs
fell for the sixth time in seven months. This measures the change
in the number of advertisements in both newspapers and on
This is further proof that businesses are remaining hesitant
to take on additional staff in the current financial environment.
This is a forward looking indicator because if businesses are not
posting ads to hire additional staff, over the coming months you
would expect to not see a significant amount of jobs being
Commsec Economist Craig James said that "...with hiring down,
unemployment is set to edge even higher in coming months. The
jobless rate has lifted from around 4.9 per cent to the 5.2-5.3
per cent region. However a jobless rate closer to 5.5 per cent is
possible later in 2011 or early in 2012. A softer job market will
keep downward pressure on wages and prices and should pave the
way for another rate cut by February next year."
Mr James continued by saying that "The monthly Job
Advertisements release is a leading employment indicator.
Employers only seek additional staff if business activity is
strong, and more importantly, if they expect that conditions will
remain favourable in coming months. It takes around 5-6 months
for the new staff to be added to the payrolls. But a fall in job
advertisements would have a more immediate impact on monthly
In Japan, the Osaka Securities Exchange is currently in late
stage takeover talks with the larger Tokyo Stock Exchange. This
increases the likelihood that Japan will have just one major
consolidated sharemarket in the not too distant future.
There is a substantial amount of information and data to
digest over the next five sessions. On the economic front in
Australia, the latest report on business confidence will be out
tomorrow as will a report on international trade. On Wednesday,
we will find out if lending has started to pickup or if it
remains subdued with Australian consumers remaining conservative
to take on additional debt. On Thursday, the all important
monthly report on the job market will be released. In this report
we will find out how many jobs were created last month and if the
unemployment rate will remain steady at 5.3 pct.
Wednesday and Thursday will be the biggest days of the week
throughout the Asia Pacific region with China releasing the bulk
of its monthly data over both days. The Chinese tend to release
most of their key economic data over a few days each
There are over 100 companies meeting to hold their Annual
General Meetings (AGMs) over the next five days. This gives
shareholders a chance to ask questions of management. A number of
big names will be meeting for their AGMs mid week. On Wednesday,
Seven Group, Lend Lease, Wesfarmers (the owner of Coles
supermarkets) and Fortescue Metals are all meeting. On Thursday
Fairfax Media, Brambles and QR National are holding their
Europe will very much continue to be the centre of attention
this week with a number of questions remaining unanswered. It has
been an eventful fortnight for the Greeks and the Europeans. Last
week the Greek Prime Minister, George Papandreou said that a
referendum will need to be held to vote on the European bailout
package. He then backtracked on this in the latter part of the
week, saying that no referendum will be held (this was following
a tough meeting with German leader, Chancellor Merkel and French
leader Nicolas Sarkozy). On Friday Mr Papandreou narrowly
survived a confidence vote prior to announcing that he will be
Developments out of Greece will continue to remain key over
the coming days. A National Unity Government is expected to be
created, which basically brings together the current ruling party
and the major opposition party. Perhaps one of the intentions of
the leaders in doing this is to show the global community that
the Greeks are working together and could help secure further
assistance from the European Union. Elections in Greece are
expected to take place on February 19.
Tonight, the 17 Eurozone finance ministers are scheduled to
meet in Brussels while all 27 European Union ministers will meet
There has been an increase in focus on Italy by global media.
Italian bonds are yielding (returning) around 6.3 pct. This
basically means that investors are demanding higher returns for
their investments in Italy due to concerns about its
uncomfortably high debt levels.
The volume of shares traded came in at 1.54 billion today,
worth $3.72 billion. 449 shares were up, 504 finished weaker and
382 ended unchanged.
At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24
futures contract is down 0.07 pct or 3 pts to 4282.
Due to daylight savings, most major European markets are now
trading between 7pm (AEDT) and 3.30am (AEDT). Futures in Europe
are pointing to a weaker start to trade tonight.
Dow Jones futures are down 0.05 pct or 6 pts to 11935,
indicating that U.S shares will likely kick off the session
largely flat when American markets open at 1.30am (AEDT). Due to
the Americans going back an hour on November 5, U.S markets will
be trading between 1.30am (AEDT) and 8am (AEDT).
Turning to currencies, the Australian dollar (AUD) has lost
some ground against the greenback and buys US103.5
Steven Daghlian, CommSec Market Analyst
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