The Australian sharemarket rose for the first time this week,
with the All Ordinaries Index (XAO) edging higher by 0.1 pct or
3.6 pts to 4433.9. Yesterday was the second quietest day for the
Aussie market however today was a little busier. The Australian
and New Zealand markets will be closed tomorrow due to the ANZAC
We improved despite heavy falls offshore, driven by European
manufacturing industry weakness and question marks over the
stability of Eurozone politics.
), the owner of Kmart,
, Bunnings and Coles rose by 1.84 pct or 54 cents to $29.88 today
after releasing its quarterly sales update to the market. Coles
made $7.85 billion in sales between January and the end of March
this year. This is around 40 pct less than the larger Woolworths
(WOW). Coles currently has 745 supermarkets and 886 liquor
Most sectors gained today, however weakness from our mining
and energy companies held the market back. Rio Tinto (
) fell by 1.58 pct or $1.05 to $65.60 while the larger BHP
) dropped 0.68 pct or 24 cents to $35.08.
The big four banks gained ground, with Westpac (
) the standout after rising 1.49 pct or 33 cents to $22.47 and
ANZ Banking Group (ANZ) improving by 1.11 pct or 26 cents to
$23.72. Commonwealth Bank of Australia (
) and National Australia Bank (NAB) both rose by around 0.3
Most retail stocks did well, with Myer (MYR), Westfield (WDC)
and Harvey Norman (HVN) all jumping by at least 1 pct.
On the economic front today, the latest Consumer Price Index
(CPI) came in at a much lower than forecast 0.1 pct. The market
expected a number closer to 0.6 pct. This makes it almost certain
that the Reserve Bank of Australia (RBA) will be cutting interest
rates for the first time this year next week. The market is
factoring in a 26 pct chance of a 0.5 pct rate cut.
Commsec Economist, Savanth Sebastian said that "Inflation is
well and truly contained and the Reserve Bank is all but certain
to cut interest rates on May 1. The low inflation data removes
the last hurdle for the Reserve Bank to cut interest rates next
month. The sluggishness in the domestic economy has ensured that
businesses continue to absorb any increases in costs, while the
strength of the Australian dollar continues to keep imported
prices low. In addition the uncertainty and downside risks to the
global economy have resulted in subdued commodity price in recent
months. Not only was the headline inflation rate virtually flat,
but the closely-watched underlying measures also recorded
decidedly subdued readings. In addition annualised underlying
inflation has fallen to the bottom of the Reserve Bank's 2-3 per
cent target band. The average of the three key underlying
inflation measures stands at 2.1 per cent. It's clear that
domestic inflation is unlikely to stand in the way of a rate cut
Markets in the region ended mixed today with shares in Japan,
South Korea and China finishing lower. Shares in Hong Kong and
Taiwan ended higher. Yesterday, a report released by HSBC showed
that China's manufacturing industry improved a little this month
compared to March. The more important official government report
will be out next Tuesday. No major data was issued in the
Europe's manufacturing industry showed signs of contraction
overnight and political problems in the Netherlands weighed on
markets. Dutch Prime Minister, Mark Rutte will hand in his
government's resignation today after a Member of Parliament quit
austerity talks, which were meant to cut costs to €16 billion.
The Netherlands is the Eurozone's fifth largest economy and still
have a AAA credit rating, which is now under threat. In France, a
close election is expected on May 6. No major data is scheduled
for release tonight in Europe. Tomorrow, the European Central
Bank's head will be speaking while the latest growth numbers will
be issued in the U.K.
In the U.S tonight, 132 companies will be posting their profit
results including Apple, 3M, AT&T and Ford. Apple is
currently the world's biggest company (by market cap). If Apple
was listed on the ASX it would make up around 40 pct of the
Australian sharemarket. To put the size of Apple into perspective
for you, it is larger than BHP Billiton, Rio Tinto, the big four
banks, Telstra, Westfield and Woolworths.
Last night, Texas Instruments shares improved in the latter
part of trade after posting better than expected profit results.
The company is the world's third largest manufacturer of
semiconductors behind Intel and Samsung.
Facebook also reported that profit slipped a touch to US$205
million in the first quarter of the year (January to March)
Tomorrow night in the U.S, durable goods orders and the
monthly Federal Reserve interest rate meeting is due to take
place. 214 companies will be posting their profit results
including Boeing, Caterpillar and Delta Airlines.
Volume of shares traded came in at 1.98 billion today, worth
$4.74 billion. 382 shares were up, 629 were weaker and 400 ended
At 4.30pm AEST on the Sydney Futures Exchange, the ASX24
futures contract is down 0.14 pct or 6 pts to 4352.
Due to daylight savings, most major European markets are now
trading between 5pm (AEST) and 1.30am (AEST). Futures in Europe
are pointing to a stronger start to trade tonight.
Dow Futures are currently higher, indicating that U.S stocks
could open in the black tonight. Due to daylight savings taking
place in the second week of March in North America and the end of
daylight savings in Australia, U.S markets will now be trading
between 11.30pm (AEST) and 6am (AEST).
Turning to currencies, the Australian dollar (AUD) buys
US102.7 cents and is trading at a 2-week low. This was following
a much lower than expected inflation report this morning. The AUD
is currently trading at £63.6 pence and €78.03 cents.
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