Australian Stock Market Report – Afternoon 1/30/14
By Tom Piotrowski, CommSec Market Analyst | January 30, 2014 6:21 PM EST
Afternoon Market Report
One of the main questions vexing investors in the early part of 2014 has been resolved in the last day. The decision by the US Federal Reserve to taper their monthly asset purchase by an additional $10 billion dollars saw brisk selling in regional equity markets on Thursday. The ASX200 showed little inclination to recover from its initial selloff for much of the day. The final 2 hours of trade saw some support emerge for the market, although it remained well in the red at the close.
One of the factors conspiring against an earlier bounce was a weaker reading for Chinese manufacturing. January data signalled a deterioration of operating conditions in China's manufacturing sector for the first time in six months. The deterioration of the headline PMI largely reflected weaker expansions of both output and new business over the month. Doubts about the near term prospects for Chinese growth weighed on the mining sector as a result.
Fortescue (FMG) underperformed its peers after it refined its production guidance. FMG shipped a record 28 million tonnes of iron ore during the December quarter, an increase of more than 43 per cent compared to a year ago. However this result was over shadowed by weather related factors. Adverse weather outcomes have meant that the miner now expects to ship 127 million tonnes of iron ore during the 2013/14 financial year, which is at the lower end of its earlier guidance. Fortescue said it remains on track to achieve a sustainable production rate of 155 million tonnes per year by the end of the March quarter.
Treasury Wine Estates (TWE) was marked down heavily after a profit warning. Weaker than expected sales in Australia and China have seen the wine maker cuts its full year earnings forecast from between $230 million and $250 million to between $190 million and $210 million for the 2013/14 financial year. First half earnings are seen to be in the range of $41 million to $46 million, compared $73 million last year. TWE shares ended trade down 19%
In the US tonight, the weekly jobless claims data is released together with pending home sales and the advance GDP (economic growth) reading. A stronger than expected reading on GDP in particular could see the markets remain focussed on yet more tapering from the Fed in the near term.
[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
Join the Conversation
- While Australian Miners Declare End of Massive Expansion of Iron Ore, Gina Rinehart Bucks Trend & Starts Export From New Mine
- Australian Stock Market Report – Morning November 24, 2014
- Australian Stock Market Report – Afternoon November 24, 2014
- Global Markets Overview – November 24, 2014
- Australian Stock Market Report – Morning November 25, 2014
- Russia's New Tactical Nuclear Weapons Program Growing Confident Against the US: Talks of World War III
- Apple and Google Engage in Thermonuclear War, New Google Translate Chat App in the Works
- Kobani ISIS Fighter Sends Out Desperate Message For Prayers And Support: Euphoria Turns Into Desperation As Kurds Advance
- Chris Algieri’s Battered Face Trends On Social Media
- Home Depot Early Black Friday 2014 Sale Up To Nov. 29, 2014 Includes Special Buys On Appliances Such As Samsung Refrigerators, Whirlpool Electric Ranges And Hoover Vacuum Cleaners
- Andrew Robb Asks Obama Not to ‘Lecture’ Australia on Climate Change
- Highest Paid NBA Players 2014: NBA Stars Who Earn More Than LeBron James