(IBTimes) - Lunchtime REPORT
(12.45pm AEST)
On Friday night the global markets were hit by concern and
weak commodity prices. The Australian markets ended weaker with
the All Ordinaries Index (XAO) down 35 points to 4,459
points.
Friday night, global markets weakened after US non-farm
payroll numbers showed no great strength in the job market and
concern ahead of the outcome of the government elections in
Greece and France over the weekend. Key markets in Europe closed
around 2% lower and the US markets also in the red.
News early this morning that the current French President Nicolas
Sarkozy conceded defeat to Francois Hollande, the Socialist party
leader, after the Socialists won around 52% of votes in its
election. Hollande is pushing for better growth in France and
less austerity (budget cuts). This win will have wide
implications for the Eurozone and the Euro currency. Since the
outcome the Euro has fallen 1 Euro dollar against the US
dollar.
The Greek elections on the other hand are far from being won.
There is a mix match of parties that are now trying to work
together to claim control, after the 2 largest parties the
incumbent Pasok Party, that voted for the tough austerity
packages, and the New Democracy party- lead by the caretaker
prime minister Lucas Papademos, did not win a majority of the
vote. The anti-bailout party, Syriza, won 16.6% and Independent
Greeks Party won 10.5%. Even with the minority parties polling
well, The Communist Party winning 8.5%, The Anti-immigrant - Neo
Nazi Party - Golden Dawn Party received over 7% of the vote at
this stage. If a full decision can't be made in 2 weeks the
Greeks will go back to the polls, this will only add more cost
and political and social unrest.
At the start of trade the market fell in to the red, as
expected, The All Ordinaries Index (XAO) down 59 points to 4,399
points, with big losses for energy and mining firms and non-
essential retailers ahead of today's release of the March retail
sales numbers. By lunchtime the All Ordinaries Index (XAO) was
still down 81 points to 4,378 points, the better than expected
March retail sales numbers had given some joy to the food and
beverage retail stocks but most of the other areas of the market
were still in the red.
Commodity prices fell on Friday night, with the US oil price
now at 12 week lows, off over 4.4% on Friday as concerns over US
growth and future demand for energy products led to the slide. US
crude oil supplies now sitting at 21 year highs and news of
higher future contact fees for anyone speculating in the markets
have pushed prices lower in morning trade. The US oil price is
now trading at US$96.30 a barrel off another 2.2% this morning or
US$2.20. S&P/ASX 200 Energy sector off 3%, with Woodside
Petroleum Limited (WPL) off 1.8% to $34.74 and Santos Limited (
STO
) falling 4.38% to $13.09. Origin Energy Limited (ORG) was lower
by 1.7% to $13.15 and Oil Search Limited also off over 2% to
$7.15.
Coal stocks also down, Whitehaven Coal Limited (WHC) today
announced it has put in an offer to acquire the remaining shares
in Coalworks Limited (CWK) that it currently doesn't own, for
$1.00 a share which is a 17% premium to the closing price last
Friday the 4th of May. Whitehaven's share price off 4.28% to
$4.70 and CWK shares one of the best performers on the market
this morning up 15.79% to $0.99cents. Gloucester Coal Limited
(GCL) also higher up 0.13% to $7.53 while New Hope Corporation
Limited (
NHC
) off 4.46%.
Our big name mining stocks hit hard, the S&P/ASX 200
Materials sector off 3% or 337 points. Rio Tinto Limited (
RIO
) fell 3.79% to $62.44 while BHP Billiton Limited (
BHP
) eased 3.5% to $34.75. Fortescue Metals Group Limited (FMG) fell
over 3.8% to $5.32. Our largest listed gold miner, Newcrest
Mining Limited (NCM) off 1.29% to $25.32 and Kingsgate
Consolidated Limited (KCN) up 0.49% to $6.13, after the gold
price rallied on Friday night but in early Asian trade has given
back all Friday's gains and is now trading at US$ $1,638 an
ounce. Manufacturer of industrial and specialty chemicals,
commercial explosives Orica Limited (
ORI
) released its half year results today. The result was in line
with market expectations with a first half profit till the end of
March 2012 down 4%. Orica's Net Profit after Tax (NPAT) of $253.3
million was hit by the cost of a recent plant closure at $90
million. The company declared an interim dividend of $0.38 a
share in line with expectations and its share price rose by 0.15%
to $26.85.
The S&P/ASX 200 Financials sector off 1.18%, with the four
major banks in the red. Westpac Banking Corporation (WBC) off
0.79% to $22.73 and Commonwealth Bank of Australia (CBA) down
0.68% to $52.26. National Australia Bank Limited (NAB) lost 1.6%
to $24.72. Australia and New Zealand Banking Group Limited (ANZ)
off 1.37% to $23.13 and merchant bank Macquarie Group Limited
(MQG) off another 4.23% to $27.58.
S&P/ASX 200 Consumer Staple sector limited its early
losses after today's Australian Bureau of Statistics retail sales
result for March gained 0.9% over the month higher than the 0.2%
expected by the market. This strong read for March helped list
the quarterly result to 1.8%. Our 2 largest food retailers
Woolworths Limited (WOW) and Wesfarmers Limited (WES) reduced
early losses. Woolies still down over 0.8% at lunch to $26.66 and
Wesfarmers the owner of Coles off another 0.75% to $30.36.
The Australian dollar (AUD) continued to lose ground against
the greenback over the weekend, but has regained a little ground
in morning trade after the better than expected read on retail
sales for the month of March, and buys US$101.32 cents. The AUD
is currently trading at €78.10 cents.
[Kick off your trading day with our newsletter]
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily
Original Source:
http://www.ibtimes.com/articles/337818/20120506/australian-stock-market-report-midday-5-7.htm
For more information, go to
www.ibtimes.com