Australian Stock Market Report – Afternoon 5/17/13

MARKET CLOSE REPORT

(4.30pm AEST)

The Australian market not only held onto its gains but extended them further this afternoon. The ASX200 Index jumped by 0.3 per cent, making it three stronger sessions this week. Despite the rise, local shares slipped by 0.5 per cent over the past five sessions. This makes it the first week of losses in a month.

The recently underperforming mining and energy sectors were the standouts today. Mining stocks jumped by 1 per cent, with BHP Billiton (BHP) recording its best daily improvement since 7 May. The smaller Rio Tinto (RIO) improved for the first time in five days, however has slumped by 5.4 per cent this week.

The country's second biggest airline, Virgin Australia (VAH) was a winner after yesterday's hefty falls. VAH jumped by 10.5 per cent however has plummeted by 7.69 per cent this week due to a profit warning.

Earnings downgrades hurt both Wesfarmers (WES) and mining services provider, Worley Parsons (WOR) today. WES dropped by 2.87 per cent while WOR did worse, falling by 12.52 per cent.

Markets in South Korea and Hong Kong were closed, however shares in Seoul jumped by 2.16 per cent this week. Stocks in Hong Kong slipped by 1 per cent, the Japanese market (Nikkei 225) jumped by 2.94 per cent (helped by a weaker yen) while Chinese shares ended a touch higher for the third consecutive week.

It's been an eventful week, with a raft of economic reports issued in Australia, the region and further offshore. Locally, the number of home loans issued in March jumped by 5.2 per cent. The monthly NAB business survey showed that the business community isn't feeling quite as upbeat as hoped for. Petrol prices rose by 1.2 cents/litre on average at the pump across Australia last week. Pump prices are likely to rise further following the Australian dollar weakness and a stronger oil price. On Tuesday, a monthly report showed that total new lending rose by 2.5 per cent in March. We're coming off the back of the best start (quarter) to a new year since 2009 for owner-occupier home loans. Wages are rising slightly and new car sales remained subdued.

Across the region, comments by China's Premier that further stimulus in China to boost its economy is unlikely, did little to assist markets.

Looking ahead, the monthly consumer sentiment reading will be issued in the US at 11.55pm (AEST), 25 minutes into the American session. The market is expecting a rise in confidence from 76.4 to 77.9. A reading above 50.0 indicates optimism. The results are based on a survey of 500 consumers, covering questions on market and economic opinions.

By market close today, 1.6bn shares exchanged hands, worth $5.13bn. 442 stocks finished higher, 460 ended in the red and 374 were flat.

The Australian dollar has weakened further since lunch, buying just US97.4 cents, US8c lower than this time last month against the greenback.

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