(IBTimes) - MARKET CLOSE
The Australian sharemarket improved for the second time this
week today, with the All Ordinaries Index (XAO) edging higher by
0.5 pct or 21.6 pts to 4353.8. It certainly was an eventful
session, with stocks treading water this morning in anticipation
of the monthly jobs numbers. The market reacted well to the news
as did the Australian dollar, however started to weaken following
some disappointing signs for China's exports.
European shares sunk to a four-month low overnight and
American markets lost ground for the sixth consecutive session.
Fears that Greece will have to leave the Eurozone continued to
concern investors. Greece is yet to form a government following
the elections last weekend. Leader of the far left party in
Greece said that he might scrap previous bailout agreements
should his party successfully form a coalition. He has two days
remaining to form a government; otherwise the Greeks will have to
return to the polls again next month.
Today was the busiest day of the week for the release of
profit results. National Australia Bank (NAB) became the third
major bank in less than a fortnight to release its half yearly
profit numbers (October 2011 to March 31 this year). The bank's
cash profit was $2.82 billion, but net profit was impacted by its
underperforming British business. It announced a 90 cent a share
dividend. Both Westpac (
) and ANZ Banking Group (ANZ) announced profit results close to
$3 billion for the half.
ANZ went ex-dividend today, which resulted in its shares
slumping by 4.2 pct or 97 cents to $22.15. This means that if you
bought ANZ shares today or plan on purchasing its stock over the
next couple of days or weeks, you would not be eligible to
receive the next dividend payment of 66 cents a share due to be
paid to investors on 2 July.
Global media giant, Newscorp (
) today announced a 47 pct rise in its quarterly profit to US$937
million despite the ongoing phone hacking scandal. The company's
bottom line was boosted by its cable network and its Hollywood
film unit (strong performances from the second Alvin and the
Chipmunks film added to its earnings).
Optus recorded a $787 million profit for the 12 months to
March 31. Optus will be appealing to the High Court over the
Federal Court's ruling which ended the TV Now service for mobile
users (where customers could watch free-to-air programs on their
phones). Optus is owned by Singapore Telecom.
Oil refiner, Caltex (
), AMP and Rio Tinto (
) all held their Annual General Meetings (AGMs) with shareholders
today. AMP let shareholders use their iPhones to cast votes at
BHP Billiton (
) shares rose 0.84 pct or 29 cents to $34.62 while the smaller
Rio Tinto (
) gained 1.16 pct or 71 cents to $61.94.
On the economic front, Australia's unemployment rate improved
from 5.2 pct down to 4.9 pct and 15,000 jobs were created in
April. This was significantly better than market
Commsec Economist, Savanth Sebastian said that "Recently the
Reserve Bank Governor commented on the pessimistic outlook
displayed by Australians compared with foreigner's views on
Australia. And if there was a time to be more optimistic it is
now. Australia has one of the lowest jobless rates going around
in the advanced world. Comparing the job market in Australia with
the likes of the US and Europe is like comparing chalk and
cheese. Australia's job market remains healthy, supporting growth
in the broader economy. And it is still the case that an extra
50,000 odd workers now have jobs compared with two months ago.
And that means more latent spending power. Of course in the
current environment people are still more likely to be saving
rather than spending, but that psych will shift as households
adjust to the super-sized rate cut."
In the region, China's trade balance for April was out and
came in significantly better than expected. The major concern was
the fact that exports grew at almost half the expected pace over
the month. Tomorrow will be the busiest day of the month in China
for economic news, with inflation, retail sales, production and
investment reports all out throughout the day.
In Europe tonight, the Bank of England (BOE) will be making
its decision on rates and is expected to stay on the interest
rate sidelines for another month. Rates in the U.K are at 0.5
pct. Last week, the European Central Bank (ECB) decided to keep
rates on hold at 1 pct. In an interesting move from the
Portuguese government, four public holidays will be dropped in
another move to cut costs and continue with austerity measures.
Two of the public holidays are actually religious festivals. One
of the holidays is a day which celebrates Portugal's Independence
from Spanish rule almost 400 years ago.
In the U.S tonight, the weekly unemployment claims report will
be issued in addition to the American trade balance (which
measures the difference between exports and imports in March) and
a speech delivered by the Federal Reserve Chairman, Ben Bernanke
titled "Banks and Bank Lending" in Chicago.
Volume of shares traded came in at 2.09 billion today, worth
$5.87 billion. 499 shares were up, 473 were weaker and 411 ended
At 4.30pm AEST on the Sydney Futures Exchange, the ASX24
futures contract is up 0.07 pct or 3 pts to 4304.
Due to daylight savings, most major European markets are now
trading between 5pm (AEST) and 1.30am (AEST). Stocks are expected
to open a little higher tonight.
Dow Futures are 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) has
improved against the greenback following the better than expected
jobs report and buys US101.1 cents. The AUD is currently trading
at £62.7 pence and €78.04 cents.
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