MARKET CLOSE (4.30pm AEST)

The energy and mining sectors were the best performers yesterday, but it was a very different story today, with both sectors holding the market back. The ASX 200 index (XJO) fell 1.8 pct or 84.1 pts to 4696.1 while the broader All Ordinaries index (XAO) slumped by 1.7 pct or 81.6 pts to 4776.6.

The S&P/ASX 200 Materials index fell 2.57 pct or 355.2 pts to 13482.1, off the back of weaker commodity prices overnight in U.S trade. Australia’s largest miner, BHP Billiton (BHP) dropped 2.58 pct or $1.17 to $44.13 while RIO Tinto (RIO) fell 2.04 pct or $1.66 to $79.79.

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Australia’s largest steel company BlueScope Steel (BSL), said it will report a small net loss for the second half of this financial year, with profit hurt significantly by a much stronger Australian dollar, less demand and lower steel prices. The good news for its shareholders today however, was that the market was expecting a worse result. BSL shares rose 1.95 pct or 3 cents to $1.56.

The S&P/ASX 200 Telecommunication Services index fell 0.25 pct or 2.5 pts to 1013.7 after a strong start to the day. Singapore’s largest telecommunication company, Singapore Telecommunications (SGT) rose 2.13 pct or 5 cents to $2.40 after releasing its full year profit results today. Profit fell by 2 pct to an equivalent Australian dollar amount of $2.8 billion. Optus, which SGT owns was one of the company’s standouts after earnings rose 15 pct for the 12 months to March 2011.

Australia’s largest airline, Qantas (QAN) ended 0.93 pct or 2 cents lower to $2.12 after the 1 hour strike planned for tomorrow was called off at around midday today. This means that the 31 flights which were expected to be cancelled in addition to the 46 expected to be delayed should run to schedule on Friday.

The S&P/ASX 200 Financials index fell 1.5 pct or 67.2 pts to 4424, with ANZ Banking Group (ANZ) ending lowest after the company went ex-dividend today. This means you would have needed to purchase ANZ shares no later than yesterday to be eligible for its 64 cent a share dividend scheduled to be paid on July 1.

On the economic front in Australia today, the Australian Bureau of Statistics (ABS) released its latest monthly employment report at 11.30am (AEST). Employment fell by 22,100 in April, making it the biggest decline in almost 2 years with all the falls coming from full-time positions.

The number of full-time jobs fell 43,300 in April, while part-time jobs rose 26,900. The unemployment rate remained unchanged at 4.9 pct.

Commsec Economist, Savanth Sebastian said that “The rapid fire rate hikes and sluggish consumer activity is starting to show cracks in the labour market data. More and more businesses are telling us that conditions are tougher now than at the height of the global financial crisis and earlier this week the NAB business survey highlighted the weakness in business trading conditions. Profitability is being squeezed and forward orders are being pared back – all a clear sign that businesses are finding times tough.”

The Reserve Bank of Australia (RBA), also reported on the latest monthly credit card statistics. The average credit card balance in March remained relatively flat at $3,321. While there has only been a very modest 2.3 pct rise in credit card balances over the past year, purchases made using debit cards have jumped 20.5 pct.

Mr Sebastian commented on the above credit card statistics by saying that “Aussie consumers are increasingly using their own money (debit cards) to make purchases rather than put them on credit. Purchases made on using debit cards are up almost 21 per cent on a year ago, while purchases made on credit card have grown by just over 3 per cent compared with a year ago.”

Out of Asia, yesterday was China’s biggest day of the month for economic releases while today was Japan’s moment in the spotlight.

Japan’s current account for the month of March was lower than expected. This measures the difference in dollar value between imported and exported goods and services. Japan’s current account surplus has fallen by 34.3 pct over the 12 months to May with the effects of the natural disasters hurting the nation’s exports. The surplus came in at around AU$19.3 billion Australian dollar equivalent for the month.

Japan’s Cabinet Office’s Economy Watchers Sentiment index was released at 4pm (AEST) and rose more than expected to a reading of 28.3, however has weakened by more than 40 pct following the earthquake, tsunami and nuclear disaster in mid March. A reading below 50.0 indicates pessimism.

Data was also out today which measures the total value of new orders placed with machinery manufacturers over the previous month. There has been a 32.3 pct rise in machinery orders over the past year.

Toyota Motor Corp’s (7203;jp) quarterly profit slumped by 77 pct in the previous quarter off the back of disrupted production due to March’s natural disasters. Quarterly net profit fell to JPY25.5 billion for the first 3 months of this calendar year. Japan’s largest carmaker’s share price is still managing to gain strongly by 3.36 pct or JPY110 to JPY3375. Toyota has over 317,000 employees worldwide and was founded in 1937 by Kiichiro Toyoda.

In Europe, monthly industrial production data will be released from both the U.K and Europe. These numbers will measure the change in the total output produced by manufacturers during March.

The European Central Bank (ECB) is scheduled to release its monthly bulletin at 6pm (AEST) tonight. This report tends to be a few hundred pages in length and covers monetary and financial developments, prices, costs, output and the labour market.

Last month’s report included some commentary on the political tensions in North Africa, in addition to its potential impact on the Euro area and oil prices.

The report stated that “Oil prices are the key link between political developments in the Middle East and North Africa region (MENA) and the euro area and the global economy. Brent crude oil prices have increased by more than 25% since the beginning of January 2011 – when unrest intensified in Tunisia – and have spiked in particular in the wake of turmoil in Libya. Political developments in MENA countries tend to increase the geopolitical risk premium in oil prices given the region’s crucial role in global energy supply. The MENA region accounts for more than 40% of global oil production and two-thirds of global oil reserves (see Charts A and B). Furthermore, spare capacity in global oil production is concentrated in the region, with Saudi Arabia alone accounting for almost 80% of OPEC’s effective spare capacity in February 2011, according to International Energy Agency estimates. The region also plays an important role in global gas supply, as it accounts for around one-fifth of global gas production and holds almost half of global gas reserves.”

It is also gearing up to be a busy evening of economic releases out of the U.S tonight with retail sales and the latest weekly unemployment data both released. Retail sales are expected to rise by 0.7 pct in April. The market is expecting 430,000 Americans have probably filed for unemployment benefits for the first time last week.

The Federal Reserve Chairman, Ben Bernanke will be testifying before the Senate committee on Bank, Housing and Urban Affairs in Washington DC.

Volume of shares traded came in at 2.74 billion today, worth $6.00 billion. 327 shares were up, 768 finished weaker and 392 ended unchanged.

At 4.30pm AEST on the Sydney Futures Exchange, the ASX24 futures contract is down 0.09 pct or 4 pts to 4684.

Dow Jones futures are currently pointing to a slightly weaker start to trade when American markets open at 11.30pm (AEST) tonight.

Turning to currencies, the Australian dollar is a little stronger and buys US106.2 cents, JPY86.12 and EUR74.71 cents.

The best performing stock today was Monto Minerals (MOO), which rose 47.06 pct or 0.8 cents to 2.5 cents today. MOO is an Australian industrial minerals mining, processing and marketing company.

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