Australian Stock Market Report – Midday 1/24/14
By Tom Piotrowski, CommSec Market Analyst | January 24, 2014 3:04 PM EST
Mid Session Report
Sellers continued to make their case in early trade on Friday. There have been few consolations on offer for the bulls in recent days. A small positive has emerged on Friday. On several occasions sellers attempted to force the index through the 5250 area on a sustained basis. However buyers seemed content to defend this area. Having failed on 4 occasions, sellers retreated. Thereafter the market recovered ground quickly to be in positive territory at lunchtime. The question this afternoon will be whether sellers return to test the markets mettle once again.
An office worker is reflected in the window of the Australian Securities Exchange building displaying the ASX50 curve for Wednesday in central Sydney August 7, 2013.
Miners have played a part in the improved tone half way through the day. Gold stocks in particular have been well supported after the yellow metal rose by 2% overnight. Newcrest has been leading gold miners higher with gains of more than 5% seen at lunchtime helped by the strength of recent production numbers and being on track to become cash-flow positive in the 2014 financial year.
On the negative side of the ledger discretionary retailers are under pressure. A series of outcomes this week have cast a pall over the sector. The higher reading for December quarter inflation seems to have sealed the fate where further rate cuts from the RBA are concerned. Additionally, the latest read on consumer confidence revealed that the outlook for employment is a concern. Combined with elevated petrol prices, the outlook for retailers is being compromised.
The bottom line was in evidence this morning when The Reject Shop (TRS) delivered its trading update. The group reported flat sales and warned of margin contraction. A weak trading period in the lead up to Christmas and discounting were cited as reasons for flat sales in the first half. Sales rose 17.7% over the previous corresponding period to $385.5 million; comparable store sales were flat overall. TRS indicated that continued weakness in the currency would be a negative for margins going forward. At lunch the shares were down 24%
Other names amongst the discretionary retailers have been under pressure as a result of the TRS update. JB Hi Fi (JBH) has shed 1%, Harvey Norman (HVN) and David Jones (DJS) have lost in the range of 2%, Myer (MYR) has eased by more than 2%.
[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
- Manchester United Transfer News: Wilfried Zaha Might Stay After Impressing Van Gaal Against Inter [VIDEO]
- Grimm Season 4 Spoilers: Comic-Con Answers Served, Nick 'Un-Grimmed' Affects His Wesen Friends' Honeymoon
- Transfer News: Ron Vlaar to Consider Villa Exit, May Move to Tottenham
- AS Roma's Seydou Keita Throws Water Bottle at Real Madrid defender Pepe for Spitting [VIDEO]
- The Mentalist Season 7 Spoilers: CBS Skips Simon Baker's Patrick Jane in Fall Schedule, Josie Loren Joins Cast