Australian Stock Market Report –Afternoon 1/8/14

EVENING REPORT
(5pm AEDT)

The local market failed at its attempt to recover this afternoon despite improving from the lows hit just before midday. The All Ords (XAO) finished largely flat after three days of losses, with the index slipping by a few points.

The miners continued to act as the most significant drag on trade, with big names such as BHP Billiton (BHP), Rio Tinto (RIO) and Fortescue Metals (FMG) all struggling to continue their strong run experienced between July and December last year. The resources industry has improved by 17.8 per cent since July 2013, outperforming the broader Australian sharemarket by 6.4 per cent.

While there was no major market moving data out today, the Australian Bureau of Statistics issued a report on job vacancies. There was a 1.7 per cent fall in the number of job vacancies between September and November (15.7 per cent drop over the year). Over the year, losses in the public sector were the biggest drag on jobs.

The major banks were mixed, with Commonwealth Bank (CBA) the only improver. CBA edged higher by 0.21 per cent, while the other three majors ended a touch lower.

It was yet another quiet day for the Australian sharemarket with 2.05bn shares changing hands, worth $3.4bn. 461 stocks were higher, 417 ended in the red and 372 finished unchanged. We are yet to have a trading day with more than $4 billion changing hands (closer to the norm).

Looking ahead, tonight looks set to be a busy session for global markets. In Europe, the region's latest jobs report will demand much of the attention for any sign of improvement. The market is expecting little however, with a 12.1 per cent jobless rate likely. A report on factory activity in Germany together with a trade update from the euro zone's biggest economy will also be in focus.

In the U.S. tonight, the minutes from the Federal Reserve's latest monthly meeting will be issued. This will be particularly important considering the Fed decided to reduce its US$85 billion stimulus program by US$10 billion. The ADP non-farm jobs report will also be issued and is a measure of the number of private sector jobs either created or lost in the previous month. The more important official government report which takes into account private and public sector positions is scheduled for release this Friday

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