Australian Stock Market Report – Afternoon 1/22/2013
January 22, 2013 5:38 PM EST
Afternoon Market Report
The market inertia that dominated the start of the week continued for regional markets on Tuesday. The close of trade for the ASX 200 saw only modest gains on similarly modest volume. The atmosphere of inertia in itself is a test for the overall market. Since November last year, the index has rallied in the order of 10%. The end of 2012 has seen investors become less risk averse with hurdles being navigated successfully. It will be worth examining the behaviour of markets in general in the event that prices are challenged once more by a "big picture event". It will be instructive to see if lower prices are supported by investors.
The S&P/ASX200 index inched up 0.03 per cent to 4,779.1 points, while the broader All Ordinaries index edged up 0.01 per cent to 4,802.9 points. 1.8 billion shares were traded valued at $3.7 billion. 397 stocks closed higher, 538 ended down and 369 were unchanged.
Most sectors measured by the ASX ended lower. It was only a solid advance for the industrial sector that allowed the index to finish higher. To that end, Brambles led industrials higher, the stock closed almost 2% higher, Transurban was another member of the group that posted a solid gain, ending at $6.08 a gain of 13 cents or 2.2%, in the absence of any news. At the same time, utility and infrastructure stocks were the next best improved group, AGL Energy shares finished at $15.80 a gain of 17 cents or 1.1%
For some time a cloud has hung over the mining services sector. Today there was a reversal of fortunes for one of the high profile names in the sector. Macmahon Holdings rose more than 5 per cent after the mining contractor announced a $1.8 billion deal with Fortescue Metals Group. The five-year contract is milestone for the group being the biggest ever signed by Macmahon. The work undertaken will see Fortescue expand its Christmas Creek iron ore mine in the Pilbara of Western Australia. As a result of the contract win Macmahon says that its mining order book is at $3.6 billion, a historic high for the group.
Rio Tinto remained in focus in the aftermath of last week's write down and management overhaul. Market speculation is increasingly turning around the possibility that Rio is considering a share buyback after announcing a US$14 billion write-down last week. The initiative would be seen as a part of a broader strategy to regain favour with investors who been frustrated by RIO's inability to execute on recent major strategies without significant pitfalls. Rio Tinto shares finished the day at $66.89 up 44 cents or 0.66%.
Another company benefiting from a contract win was Engineering firm Downer EDI. Downer has been awarded a $90 million contract by the NSW government which is intended to ease congestion in a major freight corridor. Downer will build two passing rail loops on the NSW Central Coast. The stretch of rail track is part of Australia´s busiest rail corridor linking Melbourne, Sydney and Brisbane. Downer shares closed at $4.42 a gain of 4 cents or 0.9%.
Tomorrow brings with it the highlight of the week on the local data front, the QIV inflation report. Expectations for the CPI centre on a headline figure of +0.4% q/q and an underlying figure of +0.6 0.7% q/q. That level would see underlying inflation comfortably in the middle of the RBA's 2 3% band. In the context of recent trends middle of the range inflation would not give the RBA cause to cut rates in February.
[Kick off your trading day with our newsletter]
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily
Most Popular Slideshows
- Taylor Swift Named Forbes' Second Highest Paid Country Musician [PHOTOS]
- Forever Lost: Indescribable Anguish for Malaysia Airlines MH17 Families, Remains of Some Victims May Never Be Found (PHOTOS)
- Global Aviation Accidents: UN to Form Safety Task Force, Gov'ts Should Share Intelligence Info to Avert Future Incidents on Flying Over Warzones (PHOTOS)
- Lunch with the Gods: Pope Francis Eats with Vatican Workers in Cafeteria
Join the Conversation
- El Pollo Loco Shareprice Up 33% on 1st Day of Trading
- South Australia OKs $800M Copper, Gold & Iron Ore Mine on Prime Agri Land in Yorke Peninsula
- Long Beach Real Estate Market Is Pricing Out Home Buyers with Limited Budget
- 93% of Mining Leaders See Extremely Low or Zero Growth Prospect for Industry in Next 1-2 Years; No Immediate Plans by BHP for Olympic Dam Expansion
- Australian Stock Market Report –Midday July 30, 2014
- Transfer News: FC Barcelona, Man Utd to Compete for Juan Cuadrado's Signature as Fiorentina Reveal Willingness to Sell
- Hilary Duff's New Music Video Chasing the Sun Goes Viral on YouTube [WATCH VIDEO]
- LeBron James to Return to Miami, Face Heat on Christmas Day 2014
- Shanghai Stock Exchange Will Not Extend Trading Hours
- Qatar's Surging Real Estate Prices Won't Affect Thriving Economy – Report