Australian Stock Market Report – Afternoon June 6, 2014

EVENING REPORT
(4.30pm AEST)

The Australian sharemarket continued to improve this afternoon, taking the gains to almost 0.5 per cent. Gains from U.S. markets and the first interest rate cut in six months for the European Central Bank helped lift stocks overnight. Improvements from the major banks accounted for around half of the market's gains today.

Despite today's rise the All Ordinaries Index (XAO) still slipped by 0.55 per cent over the past five days. In percentage terms this week, the worst performers were the miners, consumer discretionary and staples together with the defensive telcos. All the above industries fell by at least 1 per cent this week. Thanks to a strong rise today, the financials and property trusts were the only two sectors to finish the week a touch firmer.

Almost all regions of the Australian sharemarket improved today with the exception of the defensive telecommunication and utility sectors. Telstra (TLS) slumped by 1.32 per cent or 7 cents today to $5.23. TLS rose to a hit a nine year high over the past fortnight.

The mining sector managed to edge a little higher by the close, helped by Australia's second biggest listed company by market capitalisation BHP Billiton (BHP) which rose by 0.11 per cent. Iron ore producer Fortescue Metals (FMG) slumped by 2.8 per cent.

The major banks contributed most to the market's rise, with the big four finishing as much as 1.3 per cent firmer; adding 15.5pts to the All Ordinaries Index.

A public holiday in South Korea kept its markets closed today. South Korea is Australia's fourth biggest two-way trading partner and has the seventh largest sharemarket in the region.

It's been a big week for economic news globally. The Reserve Bank decided to keep rates on hold at 2.5 per cent for the 11th month, the Australian economy expanded by a better than expected 1.1 per cent between January and March, retail spending rose for the 12th month, two reports on China's manufacturing industry provided mixed signals and Australia recorded a worse than expected $122 million trade deficit.

At the close, 1.89 billion shares were traded today, worth $4.67 billion. 555 stocks were higher, 411 ended in the red and 395 were unchanged.