Australian Stock Market Report – Midday November 17, 2014

A mine worker looks at stacks of coal in an open-cast steam coal mine located in the Ordos mining district, Inner Mongolia Autonomous Region, March 14, 2014. China's top producing coal province of Inner Mongolia, where Ordos is located, is in crisis. Tumb — IN PHOTO: A mine worker looks at stacks of coal in an open-cast steam coal mine located in the Ordos mining district, Inner Mongolia Autonomous Region, March 14, 2014. REUTERS/Fayen Wong REUTERS/Fayen Wong

Miners help moderate losses

 The open of trade on Monday saw the ASX 200 go the way it has done for most sessions in recent weeks, down. The low point of the morning saw the index at a deficit of 34 points, although there was no sign buyers were keen to start a new week by taking advantage of lower prices. The weaker bias was informed by the unconvincing outcomes for US and European equity markets at the weekend. US share markets finished mixed on Friday. The Dow Jones was down by 18 points or 0.1% but the S&P 500 index was up by less than 0.1% and the Nasdaq was up by 8.4 points or 0.2%. Over the week the Dow Jones and S&P 500 indexes were up by 0.4% while the Nasdaq rose by 1.2%.

 The weakness in the local markets was broad based in the first hours of trade. Mining and Energy stocks were the only 2 ASX sectors to trade higher. World oil prices rose on Friday in response to a weaker US dollar and perceptions that oil had been oversold. Brent crude rose by US$1.92 or 2.5% to US$79.41 a barrel while the US NYMEX crude price rose by US$1.61 or 2.2% to US$75.82 a barrel. At lunch, however Woodside Petroleum (WPL) and Oil Search (OSH) had given up their early gains to be trading unchanged, Beach Energy (BPT) was ahead by 3.2%. Mining stocks were well supported by firmer base metal prices, which rose by up to 1.2% on the London Metal Exchange on Friday. Gold surged as the US dollar slumped. Comex gold futures were up by US$24.10 an ounce or 2.1% to US$1,185.60 per ounce. Fortescue Metals Group (FMG) lead the bulk miners higher with an improvement of more than 4%, while gold miner Newcrest Mining (NCM) was up by 3.6%.

 Shares in Agribusiness group Elders (ELD) moved ahead following the release of results which showed the group had made a full year profit of $2.98 million for the year to September compared to a $505 million loss the previous year. Elders' operations contributed an underlying EBIT profit of $27.3 million, a $76.2 million improvement on the previous year's $48.9 million EBIT loss. This improvement was largely driven by a $13.7 million increase from Agency Services, a $30.4 million increase in Live Export Services and $28.5 million in cost savings. The major contributor in the Agency Services business was a recovery in cattle and sheep prices and volumes, driven by turnoff and live export demand. ELD shares were up by 3.7%.

 Shares in Pacific Brands (PBG) edged ahead after the group announced it is in discussions to sell its shoe and licensed brands group or Brand Collective division, which has brands that include Volley and Hush Puppies while having distribution licenses for brands including Superdry and Mossimo. The group continues to pursue a strategy of selling off assets to reduce costs and focus on its Bonds and Sheridan divisions. The decision comes on the heels of the $180 million sale of its work wear division, which includes the Hard Yakka, KingGee and Stubbies brands. PBG share were up 1.5%

 The Aussie dollar has reclaimed ground lost on the back of a rally in the US dollar. A short time ago the local unit was at 87.8 US cents.

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