Australian Stock Market Report – Afternoon 11/5/13

EVENING REPORT
(5pm AEDT)

The Australian sharemarket rose for the first time in four trading days, with the All Ordinaries Index (XAO) gaining by 0.8 per cent or 41pts to 5425.7. Most of the key data globally is out on Thursday, Friday and Saturday; namely Chinese and American economic data.

The Reserve Bank (RBA) made no surprise announcements; keeping interest rates at a 53 year low of 2.5 per cent. The strength of the Australian dollar was raised as an issue however. Contained in the RBA's statement was this line: "The Australian dollar, while below its level earlier in the year, is still uncomfortably high. A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy." While it is still unlikely that the RBA will cut rates for the remainder of the year, it has at least left the door open for now.

The mining and energy sectors contributed most to today's rise, with iron ore producer Fortescue Metals (FMG) surging by 3.95 per cent. Australia's second biggest miner, Rio Tinto (RIO) jumped by 1.54 per cent while the larger BHP Billiton (BHP) edged higher by 0.88 per cent. BHP is edging closer to the $38 mark; a price that hasn't been traversed since February this year.

After having an uneventful start to the week, the financial sector added 0.71 per cent in value; with Commonwealth Bank (CBA) the standout in the sector, up by 1.18 per cent.

At the close, just 1.4 billion shares changed hands, worth just $3.24 billion. 523 stocks ended higher, 378 finished in the red while 315 closed flat. Around 30 per cent fewer shares were traded today due to the Melbourne Cup.

Looking ahead, the European Union's economic forecasts will be issued at 9pm (AEDT). This includes economic expectations for EU member states over the next two years and covers about 180 different variables. The change in Spanish unemployment will also be issued.

In the US, the ISM Services index for Oct will be out. Only a modest easing is forecast by the market. This publication wasn't impacted by the government shutdown.

Tomorrow in Australia, international trade for September will be announced. A deficit of around $350 million is expected. In August, the trade accounts were in deficit by $815 million.

[Kick off your trading day with our newsletter]