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Australian Stock Market Report
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Summary
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Close
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Movement
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% Change
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All Ordinaries
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3,821.90
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-53.30
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-1.40
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All Industrials
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3,822.00
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-55.30
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-1.40
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50 Leaders
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3,841.80
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-55.60
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-1.40
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Market Turnover
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$A 4,266,374,737.00
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LUNCHTIME REPORT
(12pm AEST)
The Australian share market is currently down by 1.4pct or 54.1pts to 3821.1. The miners are the biggest drag on the market with the financials also not helping the market’s cause.
Commodity prices fell overnight off the back of US employment figures coming in significantly worse than expected. The world’s largest miner, BHP Billiton (BHP) is 2.86pct or 98cents lower to $33.33 whilst its competitor RIO Tinto has (RIO) entered a trading halt. RIO’s underwriters are in the process of offloading shares which weren’t taken up in the recent capital raising. In similar fashion to the UK arm of the raising, almost 95pct of investors snatched up the Australian shares on offer.
The major banks are also weaker with Westpac (WBC) currently the worst performer declining 1.69pct or 33cents to $19.25 after scrapping its retail shareholder benefits package due to rising costs. The other three majors are easing by between 0.87pct and 1.23pct.
Energy companies are also feeling the pinch with the price of crude oil easing 3.5pct or US$2.45 to US$66.86 per barrel. The S&P/ASX 200 Energy index is currently 1.12pct or 159.7pts weaker to 14099.8.
On the economic front, sales of new cars and trucks gained 11.8pct, in seasonally adjusted terms in June. More information will be provided in the market close report.
The Australian dollar is weaker at lunch buying 0.7965USD
Steven Daghlian
Market Analyst
MORNING REPORT
(6.30am AEST)
US non-farm payrolls fell by 467k in June - a worse result than analysts had expected. The unemployment rate climbed to a 26-year high of 9.5pct from 9.4pct. Public sector employment fell back by 52k, manufacturing shed 136k jobs, and the services lost 244k jobs. Importantly though, the average employment decline through Q2 (436k) was a marked improvement on Q1 (691k).
US average weekly hours worked fell to a record low 33 hours, adding further downward pressure to consumer spending. US factory orders rose by a surprising 1.2pct in May - marking the best result in 11 months.
The European Central Bank left its key policy rate unchanged today at 1.0pct, as expected. The ECB’s view on the economic outlook, was unchanged from the June meeting. Based on the recent positive signs in data, the ECB is looking for a slower rate of contraction from the second half of the year. Quarterly growth isn’t expected to turn positive until the second half of 2010.
US sharemarkets fell in response to the weaker economic data. The S&P retailers index lost 3.9pct. Energy stocks followed the oil price lower, with the S&P energy index down by 3.6pct. The US Dow Jones lost 218 points or 2.6pct with the S&P 500 down 2.9pct and the Nasdaq lower by 49 points or 2.7pct.
US treasuries fell (yields higher) after a rally in early trade. The weak labour market data initially boosted the demand for treasuries before investors sold on concerns of rising supply. Next week $73billion in treasury notes is expected to be auctioned. US 10yr yields fell by 5pt to 3.50pct while US 2yr yields were lower by 6pts to 0.99pct.
The US dollar rallied against major currencies on Thursday. The Euro fell from highs near US$1.4125 to around US$1.3995, before ending US trade near US$1.4000. The Aussie dollar fell from highs near US80.50c to US79.30c, ending US trade around US79.45c. And the Japanese yen lifted from lows around 96.80 yen per US dollar to near JPY95.75, ending US trade around JPY95.90.
Crude oil prices fell again on Thursday in response to the weaker economic data and rising US inventories. The August Nymex crude contract fell by US$2.45 or 3.5pct to US$66.86 a barrel. London Brent crude fell by US$2.03 to US$66.76 a barrel.
Base metal prices were weaker on the London Metal Exchange as the US dollar strengthened. Lingering concerns on a prolonged global recovery also weighed on prices. Lead fell by 2.4pct. And the price of gold followed oil prices lower. The August Comex gold contract fell by US$10.30 an ounce to US$931.
Ahead: In Australia, car sales data is released. US markets are closed for the independence day holiday.
Craig James
CommSec Chief Economist
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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.
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News & Research / Market News