(IBTimes) - MARKET CLOSE
The Australian sharemarket has kicked off the week in better
form, with the All Ordinaries Index (XAO) up 0.2 pct or 9.2 pts
to 4351.9. Last week was the worst weekly performance for the
local market in around six months. This weekend, the Chinese
Central Bank cut its reserve requirements for Chinese banks to
give the economy a bit of a boost. This essentially means that
banks will have more cash to lend out to borrowers.
Energy stocks were leading the rise early on, but the gains
did not last long. The oil and gas producers in addition to the
mining sector ended lower, weighing on the broader market. Both
regions of the market combined make up around a third of the ASX.
BHP Billiton (
) edged higher by 0.26 pct or 9 cents to $34.46, while the
smaller Rio Tinto (
) eased by 0.11 pct or 7 cents to $61.00. Australia's third
biggest iron ore miner, Fortescue Metals (FMG) ended 0.93 pct or
5 cents to $5.34.
Three of the four major banks ended higher today, with
Commonwealth Bank of Australia (
) the best performer. CBA shares rose 1.93 pct or 100 cents to
$52.80. National Australia Bank (NAB) jumped 1.02 pct or 25 cents
to $24.80 while ANZ Banking Group (ANZ) gained 0.73 pct or 16
cents to $22.20. Westpac (
) fell by 2.86 pct or 65 cents to $22.07 after going ex-dividend
today. WBC will be paying out an 82 cent a share dividend on 2
July to eligible shareholders. This means that you will no longer
receive the next distribution if you bought the shares today or
purchase then from here on in.
The major retailers ended mostly higher today, with adventure
retailer, Kathmandu (KMD) and discount electronics retailer JB
Hi-Fi (JBH) two of the better performers after gaining by more
than 1.5 pct.
Home improvement and paint product company, Dulux Group (
) recorded a 1.6 pct drop in first half profit to $47.9 million,
partly impacted by higher costs. The result met market
expectations and its shares ended unchanged.
On the economic front, housing finance rose for the first time
in three months in March. The market reacted well to the news
initially however the improvements were short lived. Confidence
amongst home buyers still remains weak and we are expecting one
rate cut over the next three months.
Commsec Economist, Savanth Sebastian said that "The housing
sector has been finding conditions difficult but it is important
to highlight that today's data is backward looking. On an
encouraging note there does seem to be light at the end of the
tunnel- particularly given that the super-sized rate cut should
entice potential home buyers to sign on the dotted line. And the
lift in loans for newly-erected homes should lead to more
building ahead. The fundamentals for the housing sector remain
sound. The lack of new residential construction has led to pent
up demand, and with migration levels at 3½-year highs, demand for
new and existing homes should lift. It really comes down to
confidence. A substantial pick up in confidence is needed to
justify a turnaround and the recent interest rate cut may just be
Petrol prices surprisingly rose last night to a 3.5 year
higher. This is despite a significant fall in wholesale prices.
The good news for motorists is that a drop of as much as 4 cents
a litre is likely over the next fortnight.
Mr Sebastian said that "According to the Australian Institute
of Petroleum, the national average Australian price of unleaded
petrol rose by 1.2 cents a litre to 151.4 cents a litre in the
week to May 13. The metropolitan price rose by 1.7 c/l to 150.5
c/l, while the regional average price rose by 0.7 c/l to 153.4
c/l. The national weekly average weekly retail diesel price was
down by 0.1 cents a litre to 153.4 cents a litre."
This week will not be quite as busy as last week in relation
to news and economic news, but a number of events are still
scheduled to take place. Both Coco-Cola Amatil and Westfield will
be holding their Annual General Meetings (AGMs) with their
shareholders over the coming days. The latest consumer
sentiment/confidence report in addition to a quarterly report on
wages will be out on Wednesday.
This week will be subdued in the Asia Pacific region on the
economic front; however the latest quarterly growth (GDP) report
will be issued on Thursday in Japan.
In Europe tonight, the latest industrial production report and
a 10-year bond auction will take place tonight in Italy.
This week, Greece will remain in focus and continue to be a
concern for investors. The Greeks will need to form a government
by Thursday this week to prevent another election next month.
Francois Hollande will be sworn in as the first Socialist
President in France in 17 years tomorrow. The success of the
relationship between France and Germany (the Eurozone's two
largest economies) will be a key focus for markets. European
Finance Ministers will be meeting tomorrow in Brussels and the
leaders from the G8 nations are expected to meet at the end of
No major data is scheduled for release in the U.S tonight,
however the economic calendar will start filling up tomorrow.
Volume of shares traded came in at 1.48 billion today, worth
$4.23 billion. 401 shares were up, 551 were weaker and 428 ended
At 4.30pm AEST on the Sydney Futures Exchange, the ASX24
futures contract is down 0.33 pct or 14 pts to 4283.
Due to daylight savings, most major European markets are now
trading between 5pm (AEST) and 1.30am (AEST). Stocks are expected
to open in the red tonight.
Dow Futures are weaker, indicating that U.S stocks could open
in lower 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 lost
ground against the greenback and buys US99.84 cents. This is its
weakest level against the U.S dollar this year and is the first
time since mid-December that the AUD is trading below parity. The
AUD is currently trading at £62.1 pence and €77.56 cents.
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