Australian Stock Market Report – Afternoon 3-21-13

MARKET CLOSE
(4.30pm AEDT)

Despite creeping into positive territory at times, the Australian market fell once again, with the All Ordinaries Index slipping 0.1 per cent to 4976.8. So far, this has been the biggest weekly pullback for the local market in 10 months, when the All Ords lost 5.62 per cent in just five days.

A better than expected reading on the health of China's manufacturing industry did little to help markets for the duration of the session. The HSBC Flash Manufacturing gauge rose from 50.4 to 51.7. A number above 50.0 indicates industry expansion. CommSec's Chief Economist, Craig James said that "The latest economic news from China continues to encourage and that is good news for the Australian resources sector."

The Labour party's leadership poll took place after the market close. Despite it being a non-event, it was unlikely to have a significant impact on the market regardless of outcome. Concerns for the stability of the Eurozone were reignited less than a week ago by problems in Cyprus. The 17 nations which make up the Eurozone include Germany, France, Italy and Spain. This is likely to demand more attention than local events.

Billabong (BBG) slumped by more than 14 per cent today, trading at a fresh record-low. The surfwear retailer entered a trading halt at midday to investigate why its shares slumped by more than 20 per cent at one point. There were approximately five times more shares traded in BBG today than the average daily volume over the past fortnight. This all as it awaits two takeover offers from private equity firms no later than next week. BBG posted a $536M loss for the six month period between July and December last year.

Most sectors ended mixed today, with Australia's second largest miner, Rio Tinto (RIO) rising by 1.43 per cent, while the larger BHP Billiton (BHP) eased by 0.39 per cent. The major banks moved in opposite directions, with ANZ Banking Group (ANZ) the standout after jumping by 1.1 per cent.

Volume was heavier than usual with the expiry of index options pushing the number of shares traded higher. 2.7 billion units exchanged hands, worth $7.3 billion. 455 stocks ended higher, 518 lost ground while 351 finished unchanged.

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