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Australian Stock Market Report
| Wednesday 20, August 2008
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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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4,953.20
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+22.80
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+0.50
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All Industrials
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4,884.60
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+18.20
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+0.40
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50 Leaders
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4,795.90
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+17.20
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+0.40
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Market Turnover
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$A 4,608,841,734.00
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STOCKMARKET REPORT NOW UPDATED THREE TIMES A DAY
LUNCHTIME REPORT
11.30am AEST
The Australian share market is firmer at lunchtime, being lifted by gains in the materials and energy sectors on stronger commodity prices. The All Ordinaries Index (XAO) has gained 22pts or 0.5pct to 4953 while the benchmark S&P/ASX 200 Index (XJO) has added 18pts or 0.4pct to 4884.
The materials sector has gained 2.2pct thanks to rises in oil, gold and copper prices overnight. Shares in BHP Billiton (BHP) have added 2.9pct or $1.09 to $38.09 while rival Rio Tinto (RIO) has gained 3.2pct or $3.54 to $114.87. Gold miner Newcrest (NCM) has gained 4.8pct or $1.20 to $26.20.
In the energy sector, Oilsearch (OSH) is the stand-out, firmer by 8pct at lunchtime or 40c to $5.39.
The financial sector is weaker, following similar selling offshore. Shares in St George Bank (SGB) have lost 2.5pct or 72c to $28.42 while the ANZ (ANZ) is down 1pct or 18c to $15.97. Investment firm Babcock and Brown (BNB) has been placed in a trading halt, while its directors consider management and board changes ahead of its profit result tomorrow. BNB last traded at a record low of $3.45, a 24% drop from yesterday’s opening price.
Elsewhere today, soft drink manufacturer Coca-Cola Amatil (CCL) has beat market expectations with a 22pct rise in full year profit, sending its share price higher by 5.2pct or 41c to $8.35.
However pallet supplier Brambles (BXB) has fallen by 8.4pct or 42c to $5.41 after it reported a 50pct drop in full year profit and warned the global economic slowdown is likely to have an impact on its earnings this financial year.
James Hardie (JHX) shares are also being sold off, down 7.6pct or 34c to $4.16 after it reported a 39pct drop in first quarter earnings as a result of the US housing slump.
Budget airline Virgin Blue Australia (VBA) also remains under pressure, down another 20pct or 17c today to 67c as investors continue to punish Richard Branson’s company for its dismal result, released yesterday.
The Australian dollar is slightly firmer against the greenback, having been boosted by gains in commodities. At lunchtime the Aussie buying US87.2c.
Juliette Saly
CommSec Market Analyst
MORNING REPORT
6.30am AEST
US housing starts fell to fresh 17-year lows in July. Housing starts fell by 11pct to a 965,000 annual rate after rising by 10.4pct in June. Permits fell 17.7pct after lifting 16.4pct in June. The volatility reflects a change in building codes on New York City. Starts in the Midwest rose by 10pct in July.
US producer prices rose by 1.2pct in July, well ahead of expectations for a 0.6pct rise. The 10.4pct annual lift in prices was the biggest increase in 27 years. Core prices (excludes food and energy) rose by 0.7pct, ahead of expectations for a 0.2pct rise.
US sharemarkets slumped for a second straight day in response to signs of stagflationary conditions - weak economic growth, high inflation. Banks were weaker with the KBW Banks index down 2.2pct. The Dow Jones index lost 130pts or 1.1pct while the Nasdaq fell by almost 33pts or 1.4pct.
US treasuries were mixed on Tuesday. A $3 billion debt sale by Freddie Mac lured some investors away from long-dated securities. But yields on short-dated securities fell as the weaker sharemarket attracted buyers to Treasuries. US 10yr yields rose by 2pts to 3.84pct while US 2yr yields eased 4pts to 2.30pct.
The US dollar index has recorded its biggest one-day fall since mid-July, falling by 0.4pct in response to poor economic data. The Euro rose from lows around US$1.4630 in early European trade to around US$1.4790, ending US trade near the day’s highs. The Aussie dollar rose from lows near US86.30c in European trade to US87.30c, ending US trade near the day’s highs. The Japanese yen strengthened from levels around 110.30 yen per US dollar to around JPY109.55, ending US trade near JPY109.70.
Crude oil prices rose on Tuesday. Weaker US data caused the US dollar to fall, making US dollar denominated commodity prices more attractive for European and Asian buyers. The September Nymex crude oil quote rose by US$1.66 or 1.5pct to US$114.53. London Brent lifted by US$1.31 to US$113.25 a barrel.
Base metal prices soared on the London Metal Exchange on Tuesday as a weaker dollar caused investors to again shift into commodities. Comments by BHP Billiton on the fundamental strength of commodity demand also buoyed sentiment. Nickel rose 7.3pct with lead up 5.9pct. The price of gold was also higher, driven by a weaker dollar and higher oil price. The most active December Comex gold contract rose by US$11.10 an ounce or 1.1pct to US$816.80.
Ahead: In Australia, earnings results include those from AGL Energy, Brambles, Perpetual and James Hardie. In the US, weekly US oil inventory data is scheduled.
For closing prices of international markets, commodities and ADRs please go to:
News and Research > Economic Research > Daily Report
Craig James
CommSec Chief Equities 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