Australian Stock Market Report – Afternoon 12/3/13

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By Steven Daghlian, CommSec Market Analyst | December 3, 2013 7:17 PM EST

(5pm AEDT)

As expected the Reserve Bank kept the cash rate on hold at 2.5 per cent for the fourth straight month, which had little impact on the broader sharemarket. The All Ordinaries Index (XAO) slipped by 0.45 per cent, with the mining sector the biggest contributor to the weakness.

The Reserve Bank kept rates on hold (was only a 6 per cent chance of a rate cut according to markets). Some of the earlier cuts are having an impact on the economy. House prices are 8 per cent higher over the year, lending has picked up, spending is higher and approvals to build properties are up. The cash rate is 0.5 per cent lower now than 12 months again and 4.25 per cent lower than 6 years ago.

Retail spending also rose by 0.5 per cent (a little higher than expected) - up for the sixth straight month. The Federal Election is out of the way, boosting sentiment somewhat.

The mining sector slumped by 1.4 per cent today, with gold producer Newcrest Mining (NCM) falling by 6.7 per cent after rising on Monday. BHP Billiton (BHP) slipped by 1.2 per cent while Rio Tinto (RIO) lost 0.5 per cent. RIO continues to cut costs and has reduced capital expenditure by around 20 per cent in 2013.

At the close, 1.9b shares changed hands, worth $5.03b. 334 stocks were higher, 605 lost ground and 352 were flat.

Tonight will be quiet from an economics perspective. In Europe, we'll find out the latest change in the number of people out of work in Spain. The market is expecting a 44,300 rise in the jobless. An update on the construction sector in the UK is due out at 8.30pm (AEDT). The market is expecting modest expansion. In the U.S., a monthly report on the number of cars and trucks sold in November will be out. This is a measure of confidence (somewhat), as the more vehicles sold, the more optimistic businesses and consumer tend to be.

Tomorrow locally, the September quarter (July-Sept) growth report will be issued at 11.30am (AEDT). Dick Smith will be listing on the Australian sharemarket tomorrow; is expected to be worth around $500 million and was sold by Woolworths for just $20 million last year.

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