Australian Stock Market Report – Afternoon June 16, 2014

EVENING REPORT
(4.30pm AEST)

The Australian sharemarket rose only modestly today, with a lack of major data or corporate events keeping investors at bay. The All Ordinaries Index (XAO) rose by 0.1 per cent, with the recently underperforming miners managing to record healthy gains after four straight weeks of losses.

Most sectors turned positive late in trade, with the hard hit miners today's standouts. The price of iron ore has slumped for nine consecutive weeks, holding back the resource sector in recent weeks. Bargain hunters jumped in today, helping push BHP Billiton (BHP), Rio Tinto (RIO) and Fortescue (FMG) higher by as much as 0.94 per cent. Oil reached a fresh nine-month high due to the continued violence in Iraq. Iraq is the world's seventh biggest oil producer. This helped lift the energy sector, with Australia's second biggest oil and gas producer Woodside Petroleum (WPL) rising by 0.14 per cent.

The financials ended flat, with ANZ Banking Group (ANZ) rising 0.92 per cent. Westpac (WBC) edged higher by 0.1 per cent while both Commonwealth Bank (CBA) and National Bank (NAB) lost ground. The telcos rose, with Telstra (TLS) up 0.58 per cent. Utilities rose slightly, energy stocks improved thanks to the

By the close, 1.53 billion shares changed hands worth $3.99 billion. 459 stocks were firmer, 511 in the red and 417 unchanged. Tonight, Europe's latest inflation reading will be out with just a 0.5 per cent rise in prices expected. It will be busier in the U.S. however - with production, housing data and capital flows all released tonight.

The week ahead is likely to be subdued in Australia, with only a handful of worthwhile reports for the market released. Tomorrow, the Reserve Bank's board minutes from the June interest rate meeting will be a highlight. The main interest will be relating to potential comments about the Federal Budget's impact on the economy. The minutes can on occasion provide insight into the RBA's interest rate setting philosophy. On Thursday the December quarter read on population growth will also be of interest. Population expansion is a key driver of the economy. Australia's population has grown by 405,000 in the 12 months to September 2013. Detailed labour industry statistics will also be released on Thursday - which should provide a more in-depth look at job moves by industry.

Across the region, an update on China's house prices will be out over the coming days. In Europe, the Bank of England's minutes out on Wednesday will be important for currencies. In recent weeks, the central bank has provided hints rates could rise sooner than previously anticipated. European finance ministers will be meeting on Friday to discuss policies for the European Union. The Federal Reserve's two day monetary policy meeting mid-week will be a highlight in the U.S. Comments about tapering and rates will be important for currencies.