It was a volatile day on the local share market. Stocks started the trading day in the red, then received a boost mid-session, after weak Chinese manufacturing data boosted hopes of forthcoming stimulus. By close, stocks were marginally higher; with the All Ordinaries Index (XAO) adding 12.6pts or 0.3pct to 4351.6.
BHP Billiton posts improved iron ore output figures in the December quarter
US stocks gained on Friday night, after US Federal Reserve Chairman Ben Bernanke hinted a further stimulus from the US Central Bank. Around midday today, China's HSBC flash manufacturing index came in weaker than expected, sending the Australian dollar to a six week low against the greenback.
Index leader BHP Billiton (BHP) was one of the biggest drags on the market today, falling 1.2pct to $31.41 as it traded without rights to its dividend. Eligible BHP shareholders will receive 54.61c per share on the 28th September. Rio Tinto (RIO) today gained 1.2pct to $49.85.
Financial stocks were generally firmer. Shares in the National Australia Bank (NAB) gained 0.4pct to $25.30 while the Commonwealth Bank (CBA) was firmer by 0.5pct to $54.99.
Shares in discount airline Virgin Australia (VAH) fell 5.6pct today to $0.425. Middle Eastern carrier Etihad Airways today doubled its stake in VAH to 10pct, six weeks after receiving the all clear from the federal regulator. Etihad bought 221 million VAH shares on the open market. Etihad and Virgin operate 24 flights per week between Australia and Abu Dhabi, which involves code-sharing, reciprocal frequent flyer benefits and joint marketing. Six weeks ago Etihad received Foreign Investment Review Board (FIRB) approval to increase its holding from five to 10pct.
Elsewhere disappointing retail trade figures gave investors a reason to bail out of consumer discretionary stocks, with Myer Limited (MYR) down 3.8pct to $1.915 while JB Hi-Fi (JBH) was off 1.9pct to $8.96.
Shares in the Ten Network (TEN) fell to all-time lows, down 2.6pct to $0.375.
A deluge of data was released today to kick off the new month.
Retail spending fell by a surprising 0.8pct in July after lifting by 1.2pct in June. Annual spending growth fell from 5.3pct to 3.5pct. Sales fell across all eight states and territories. The biggest drop in spending occurred at "Department stores" down 10.2pct in July, marking the biggest monthly slide in over seven years.
Elsewhere, the TD Securities-Melbourne Institute monthly inflation gauge rose by 0.6pct in August following no change in prices over the following three months. Excluding volatile items, the inflation gauge rose 0.2pct in August.
The number of job advertisements fell for the fifth straight month, dropping by 2.3pct in August to stand 9.6pct lower for the year.
Company profits were lower for the third straight quarter, dropping by 0.7pct in the June quarter to stand 6.5 per cent lower than a year ago.
The Performance of Manufacturing index rose by 5.0 points to 45.3 in August. Still, it was the sixth month below a reading of 50 points, suggesting contraction in the sector.
The RP Data - Rismark Home Value Index reported that capital city home prices were flat in August after rising by 0.6pct in July. Home prices rose by 1.6pct in the past three months but are still down 2.4pct on a year ago.
According to the Australian Institute of Petroleum, the national average retail petrol price fell from 13-week highs, down by 1.8 cents to 144.0 cents a litre in the past week. CommSec tips prices to fall by 1-2 cents a litre over the coming fortnight.
"The Reserve Bank has a rock solid case to cut interest rates," said CommSec Economist Savanth Sebastian of the data. "The latest data shows that the economy is barely growing while inflation is solidly under control. The only question now is when the next rate cut will take place. Not only is the domestic data weak but recent Chinese economic data will add to the worry level."
The weak Chinese data saw the Aussie dollar fall to a six week low against the greenback. At 4.30pm AEST the Aussie was worth US102.62c, £0.647 and €81.67c.
On the market overall, a total of 1.56 billion shares were traded, worth $3.62 billion. 489 were up, 483 were down and 329 were unchanged.
At 4.30pm the SFE 200 Futures market was at 4336, up 28pts.
Wall Street is closed tonight for the Labor Day public holiday.
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