MARKET CLOSE (4.30pm AEDT)
After a very tough week and a half the Australian sharemarket
has managed to hold onto the majority of its gains for the
duration of the session. The All Ordinaries index (XAO) jumped
1.7 pct or 68.2 pts to 4125.8. All sectors improved today with
the big banks the standout performers of the day.
The S&P/ASX 200 Financials index (a measure of performance
for financial institutions) is up 2.53 pct or 94.4 pts to 3821.7.
National Australia Bank (NAB) ended 4.22 pct or 92 cents higher
to $22.74, Commonwealth Bank of Australia (
) gained 3.3 pct or $1.50 to $46.89, Westpac (
) rallied by 3.9 pct or 76 cents to $20.26 while ANZ Banking
Group (ANZ) edged higher by 2.29 pct or 43 cents to $19.20.
The S&P/ASX 200 Materials index (a measure of mining
sector performance) ended 2.47 pct or 262.2 pts higher to
10896.7. One of the best performers in the sector was mineral
exploration company, Aquila (AQA) which rose 6.62 pct or 37 cents
to $5.96 however had a tough end to the week with shares falling
by 14 pct between last Wednesday and Friday.
Qantas (QAN) held onto most of its gains and by the close of
business rose by 3.44 pct or 5 cents to $1.50. Its share price
was up by close to 6 pct at one point after a company
spokesperson said that despite the higher fuel costs and ongoing
industrial action from its employees the airline should still
post a profit of between $140 and $190 million for this half of
Last week QAN shares slumped by 12 pct taking the losses for
the YTD to over 45 pct. YTD stands for Year to Date and measures
performance (in this instance) from the start of January 2011 to
the present day.
Australia's second largest miner (and the world's third
largest), RIO Tinto (
) held an investor seminar in Sydney to give shareholders an
update on the status of its iron ore and aluminium products. The
company said that it is selling all the products it can produce
however has noticed that some customers are becoming a little
cautious due to the current situation in the Eurozone. RIO shares
rose 2.13 pct or $1.32 to $63.27 while the larger, BHP Billiton (
) gained 2.35 pct or 80 cents to $34.85.
Iron ore miner, Sundance (SDL) struggled today and fell by
5.88 pct or 2.5 cents to 40 cents. It has not been able to secure
a letter from Chinese miner, Hanlong which has made a $1.65
billion takeover offer for the company. SDL is developing a large
project in the Republic of Congo and Cameroon. Its stock was in a
trading halt for much of last week.
On the economic front today, the Australian Institute of
) said that the national average price of unleaded petrol fell by
1.5 cents to 141.5 cents a litre last week. The good news for
motorists it that as long as the savings are passed onto the end
consumer, petrol prices at the pump should fall by another 2 to 3
cents over the next fortnight.
Commsec Economist Savanth Sebastian said that "It is
encouraging to see the latest fall in petrol prices, but a
further drop in fuel prices is needed to ensure that motorists
are seeing the benefit of cheaper global oil prices. Since the
peak on October 30, the terminal gate price has fallen by 8.4
cents a litre to near five month lows, while the retail price has
fallen by just 4.8 cents. If anything the latest falls in petrol
prices just offset the rise last week without giving any
additional savings to motorists."
Tonight, Italy, Belgium and France are holding a bond auction.
This will give us an idea how comfortable investors are with
lending these Eurozone nations additional funds. This also comes
only a day after Belgium had its credit rating downgraded by one
of the big three ratings agencies.
In the U.S, the latest monthly report on the number of newly
built properties sold to Americans last month will be released. A
number of Federal Reserve members will also be delivering
speeches overnight. The Federal Reserve is commonly called the
Fed and is the U.S equivalent to Australia's Reserve Bank of
A central bank controls the flow of money within a country
(monetary policy) and tries to manipulate it for a desired affect
(such as stimulating growth by making credit/lending money
The volume of shares traded came in at 1.89 billion today,
worth $4.14 billion. 565 shares were up, 439 finished weaker and
350 ended unchanged.
At 4.30pm AEDT on the Sydney Futures Exchange, the ASX24
futures contract is up 0.15 pct or 6 pts to 4084.
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 stronger start to trade after managing to
improve on Friday.
Dow Jones futures are currently higher, indicating that U.S
stocks could start in the black tonight 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
Turning to currencies, the Australian dollar (AUD) has managed
to claw its way back a touch and buys US98.6 cents.
Steven Daghlian, Commsec Market Analyst
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