Australian Stock Market Report – Afternoon 12/2/13

EVENING REPORT
(5pm AEDT)

The Australian sharemarket has eased for the second consecutive trading day, with the All Ordinaries Index slipping by 0.8 per cent.

There were few exceptions to the sell-off today, with the energy sector finishing flat while the big banks and miners held back the market most. Commonwealth Bank (CBA) struggled and slumped by 1.25 per cent, while National (NAB) and Westpac (WBC) fell by around 0.8 per cent and ANZ Banking Group (ANZ) eased by a more modest 0.16 per cent. The financial sector is up by 24 per cent since Jan; a full 12 per cent more than broader market.

The miners also struggled, with gold miners the exceptions. Newcrest (NCM) benefited from a firmer gold price. The Australian dollar benefited from the stronger than forecast Chinese economic figures over the past two days and buys US91.5 cents - US0.5c higher than last Friday.

At the close, 1.79 billion shares changed hands, worth $4.51 billion. 342 stocks finished higher, 566 lost some ground and 376 were unchanged.

Tonight in Europe the latest manufacturing readings will be issued at 8pm (AEDT) and out later in the evening in the US. A speech by the Fed Chairman Ben Bernanke will be a highlight in the US at 12.30am (AEDT).

The start of a new month is always a busy time for markets and this week will be no different. Locally, Dick Smith will be making its market debut on Wednesday while Nine Entertainment will be listing on Friday. The Reserve Bank will be meeting tomorrow to make an interest rate decision (no change expected), quarterly GDP (growth) is out on Wed, while trade and car sales will be out later this week.

In Europe this week, keep your eye on both the European Central Bank and the Bank of England - as both central banks will be holding their monthly meetings. The ECB is likely to keep rates at 0.25 per cent while the BoE is also not expected to move rates from 0.5 per cent.

In the US, the non-farm payrolls (the most important report on jobs in the US each month) will be the highlight. This is likely to spur speculation surrounding the Federal Reserve's quantitative easing timetable. The market is currently expecting the tapering process to begin in the early part of 2014.

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