AFTERNOON REPORT
(4.30pm AEST)

The Australian share market ended what has been another volatile week on a flat note, despite attempting a rally in early trade. The All Ordinaries Index (XAO) added 2.2pts or 0.1pct to 4070.1 while the S&P/ASX 200 Index (XJO) firmed by 0.3pts to 4008.6.

Over the course of the month of September, the All Ordinaries Index lost 7.1pct.

The Australian dollar ended the day's trade at US97.63c, down 9.64c from September 1's high of US107.28c.

Overnight, US and German share markets rose after the German Parliament moved to approve the changes to the European Financial Stability Fund.

Locally, financial stocks were mixed. Shares in Westpac (WBC) fell 1pct to $20.34 while Macquarie Group (MQG) was higher by 1.6pct to $22.87.

The energy sector was a strong performer, rising 1.2pct with crude oil holding at US$82 a barrel.

Mining stocks were generally lower, with shares in Rio Tinto (RIO) down 1pct to $61.80.

Investors also switched out of the healthcare sector, which was the worst performing on the market. Shares in Cochlear (COH) dropped 3.8pct to $46.39.

Breadmaker Goodman Fielder (GFF) fell 12.5pct to $0.48 after announcing it had raised about $190 million through an institutional capital raising.

Qantas (QAN) closed slightly lower at $1.41 as Transport Workers Union members walked off the job for a second time this week.

On the market overall, a total of 2.1 billion shares were traded, worth $7.84 billion. 535 were up, 388 were down and 350 were unchanged.

Capital city home prices fell for the eighth straight month, dropping by 0.4pct in seasonally adjusted terms in August according to RP Data-Rismark. While down again in August, the decline in home prices was the smallest since April. Dwelling prices were higher than a year ago in just one capital city - Sydney (up 0.3pct). Despite lower home prices, total returns on residential property rose 1.1pct over the year. Regional house prices fell by 0.9pct in August to be down 2.8pct over the year.

Private sector credit (lending) rose by 0.2pct in August after a 0.3pct increase in July. Annual credit growth lifted from 2.9pct to 3.0 pct - effectively flat in real terms. Housing credit was up by 5.8 pct over the year - the lowest result in over 34 years. Both personal and business credit were down 0.9pct over the year.

The budget deficit for 2010/11 was $47.7 billion or 3.4pct of GDP. The fiscal balance was in deficit by $51.5 billion or 3.7pct of GDP. Net government debt stood at $84.551 billion or 6.1pct of GDP at the end of June.

Ahead tonight, personal income and spending figures for August are released, along with the New York ISM and Chicago PMI indices.