A customer walks through the fruits and vegetables section at a supermarket in Sydney April 27, 2011.
A customer walks through the fruits and vegetables section at a supermarket in Sydney April 27, 2011. Reuters/Daniel Munoz
  • Australian shares are improving for the first time since Monday, with the ASX 200 Index up 0.6 per cent. The major banks are the best improvers after a challenging week. Local stocks slumped by 3.1 per cent from Tuesday to Thursday and despite today’s gains are still near three year lows.
  • Macquarie Group (MQG) is surging by 5.4 per cent after a 27 per cent rise in annual profit to $1.6bn was better than expected. A strong result from its international operations has boosted the result while MQG has lifted its dividend to $2 and is 40 per cent franked.
  • ANZ Banking Group (ANZ) is trading ex-dividend today for its 86c/s dividend, payable at the start of July. Australia’s third largest listed bank by market cap is down 0.7 per cent but was the only major bank to beat profit estimates this week. ANZ shares are down 4 per cent this week after last week’s 4.4 per cent slump.
  • Energy stocks are the worst performers at lunch with the S&P/ASX 200 Energy Index down 1.9 per cent. The price of oil dropped by 3.3 per cent overnight as a rise in the US dollar wiped out gains recorded earlier in the week. Santos (STO) is down 3.9 per cent while Woodside (WPL) is easing by 0.6 per cent.
  • Mining shares are slightly softer with BHP Billiton (BHP) down 1 per cent, BC Iron (BCI) down 4.2 per cent and Rio Tinto (RIO) flat at lunch. The iron ore price eased by 0.2 per cent to US$60/t.
  • The Reserve Bank’s Statement on Monetary Policy was released today. This is the RBA’s quarterly assessment of the Australian economy and has cut growth estimates to 2 per cent for the year to June, 2.5 per cent to December 2015 and between 2.5-3.5 per cent to June 2016. In the 80 page document the central bank said it will “...continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target over time.” Market is pricing in an 8 per cent chance of a June rate cut.
  • China’s trade surplus in April expanded to US$34.1bn but was below consensus. The Shanghai Composite Index has slumped by 7.4 per cent over the course of the week.
  • Volume is above average at lunch with 724.4m shares traded worth $2.2bn. 489 stocks are up, 288 down and 285 unchanged.
  • The Australian dollar fell 0.5% to 0.7863 before recovering towards 0.7880 after the RBA Statement on Monetary Policy indicated further AUD declines likely and necessary. China April trade data revealed that both export and import performance is weaker than expected. Exports fell 6.4% yr/yr whilst imports shed 16.2% yr/yr.

Steven Daghlian - Market Analyst (Author)

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