Australian Stock Market Report
Friday 3, September 2010

SummaryCloseMovement% Change
All Ordinaries4577.6014.600.30
All Industrials4541.208.500.20
50 Leaders4535.60-0.400.00

Market Turnover
 		$A 5,207,203,440.00

Commentary

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AFTERNOON REPORT
(4.30pm AEST)

Australian stocks recorded another positive finish today, with investors remaining positive ahead of key jobs data being released in the US tonight. The All Ordinaries Index (XAO) added 14.6pts or 0.3pct to 4577.6 while the S&P/ASX 200 Index (XJO) gained 8.5pts or 0.2pct to 4541.2. Over the course of the week, the XAO firmed by 3.9pct.

Financial stocks recorded the biggest falls, with Westpac (WBC) down 0.7pct to $22.50 and the Commonwealth Bank (CBA) off 0.7pct to $51.57. Shares in the NAB (NAB) were slightly lower at $24.10 while the ANZ (ANZ) lost 0.6pct to $23.29. Shares in Macquarie Group (MQG) were down 1.1pct to $36.99.

Mining stocks generally performed well. Rio Tinto (RIO) was up 0.9pct to $73.79 while BHP Billiton (BHP) closed only slightly higher at $38.33. Fortescue Metals Group (FMG) closed down 1.8pct to $4.80 after a key investor launched a legal claim against the iron ore miner. FMG has rejected the claims made by Leucadia National Corporation.

The energy sector closed only slightly higher, with crude oil holding near US$75 a barrel.

Retail stocks performed well, with shares in Harvey Norman (HVN) up 2.6pct to $3.57 and Myer Limited (MYR) up 1.6pct to $3.86.

Telstra (TLS) added 0.4pct to $2.82.

Agrichemical company Nufarm (NUF) fell 3.1pct to $3.39 with law firm Slater and Gordon tipped to launch class action against the company for misleading shareholders over profit forecasts.

Sigma Pharmaceuticals (SIP), which is also facing potential class action, dropped 2.1pct to $0.475.

In economic data released today, sales of new cars and trucks in Australia fell a seasonally adjusted 0.3pct in August versus July. Passenger vehicle sales rose 3.5pct in August on year, while sales of sports utilities were up 32.5pct.

The Australian dollar ended the day’s trade weaker against the major currencies, and at 4.30pm AEST was worth US90.74c, £0.5884 and €70.77c.

On the market overall, a total of 2.16 billion shares were traded, worth $5.21 billion. 631 were up, 431 were down and 358 were unchanged.

Ahead tonight, key jobs numbers are released in the United States.

Juliette Saly
CommSec Market Analyst

LUNCHTIME REPORT
(11.45am AEST)

The Australian share market is making slight gains at lunchtime in the East, thanks to a positive lead from Wall Street and firmer commodity prices. The All Ordinaries Index (XAO) has gained 11.6pts or 0.3pct to 4574.6.

Financial stocks are dragging, with the S&P/ASX 200 Financials sector down 0.5pct. The big four are all down 1pct, while Macquarie Group (MQG) shares have added 1.5pct to $37.96.

Mining stocks are higher, BHP Billiton (BHP) up a further 0.2pct to $38.39.

The energy sector is flat, with crude oil hovering around US$75 a barrel.

Shares in Telstra (TLS) are up 0.4pct to $2.82.

Foster’s Group (FGL) continues to slide in response to the departure of its CEO Angus McKay. FGL is down 1pct to $6.04.

And agrichemical company Nufarm (NUF) has fallen 2pct to $3.43 on speculation the company could face a class action from shareholders over allegedly misleading conduct relating to profit forecasts.

The Australian dollar is worth US91.11c and €71.04c.

Juliette Saly
CommSec Market Analyst

MORNING REPORT
(7am AEST)

US pending home sales rose by 5.2pct in July, beating expectations for a 1pct fall. Factory orders rose 0.1pct in July, short of forecasts for a 0.3pct gain. New US claims for unemployment insurance fell by 6,000 to 472,000 in the latest week, bettering forecasts centred on 475,000. And US non-farm productivity was revised down to show a 1.8pct fall in the June quarter.

Sweden´s central bank has lifted its key repo rate by 25 basis points to 0.75pct. The Swiss economy grew by 0.9pct in the June quarter to be up 3.4pct on a year ago. The European Central Bank left benchmark rates at 1pct.

European shares were largely flat as investors awaited the US employment figures. The FTSEurofirst index eased by 0.1pct while the UK FTSE rose 0.1pct and German Dax was flat.

US sharemarkets rose for a second day as economic fears dissipated. Shares in Burger King rose 25.1pct after agreeing to be purchased by investment firm 3G Capital for US$3.26 billion. Dell pulled out of its bidding war with Hewlett-Packard to buy data storage company 3PAR. And same-store sales were better than expected, boosting retailers. The Dow Jones rose by almost 50pts or 0.5pct with the S&P 500 up 0.9pct and the Nasdaq lifted by 23pts or 1.1pct.

US longer-term treasuries fell again on Thursday (yields higher) as fears of a double-dip recession eased in response to positive economic data. US 2yr yields fell by 1pt to 0.50pct and US 10yr yields rose by 5pts to 2.629pct.

Major currencies drifted against the greenback in European and US trade on Thursday ahead of the US jobs report. The Euro traded between US$1.2775 to US$1.2845, ending US trade near US$1.2820. The Aussie dollar lifted from US90.55c to US91.20c, ending US trade near US91.10c. And the Japanese yen traded between 84.00 yen per US dollar to JPY84.45, ending US trade near JPY84.30c.

US crude oil prices rose on Thursday following news of a fire at the Mariner Energy oil platform in the Gulf of Mexico. Investors were also tracking the progress of Hurricane Earl. The Nymex crude oil contract rose by US$1.11 or 1.5pct to US$75.02. London Brent crude rose by US58c to US$76.93 a barrel.

Base metal prices rose for a second day on the London Metal Exchange on Thursday as investors focussed on generally positive economic data. Metals rose between 0.4-2.9pct with nickel doing best and copper lagging. And gold finished with a modest gain ahead of the US jobs report tonight. Comex gold futures rose by US$5.30 an ounce to US$1,253.40 after ranging between US$1,245.30 to $1,255.20 an ounce.

Ahead: In Australia, data on car sales and overseas arrivals and departures are released together with the Performance of Services index. In the US non-farm payrolls (employment) and the ISM services index are released.

Craig James
CommSec Chief Economist

This commentary is a general account of the day's trading and is not intended to be taken as a recommendation to buy, hold or sell any particular stock.