Australian Stock Market Report –Midday 4/7/14
By Juliette Saly, CommSec Market Analyst | April 7, 2014 12:57 PM EST
The Australian share market has started the trading week in the red, following weakness on Wall Street on Friday.
Wall Street (Photo: Reuters)
The Dow Jones Index closed almost 160 points lower, after the March employment report came in slightly weaker than expected (192,000 jobs created last month versus expectations of a 200,000 gain) while investors also sold out of technology stocks on fears they are oversold.
Locally, we are seeing nearly every sector in the red at lunchtime in the East, although there is some support in the consumer staples, utilities and property trust sectors.
In company news, conglomerate Wesfarmers (WES) is set to leave the insurance industry completely, selling off its insurance broking and premium funding business for $1.01 billion. The sale - to US based broking giant Arthur J Gallagher and Co - will need approval from the Foreign Investment Review Board as well as regulators in the UK and New Zealand. It comes just months after WES sold its insurance underwriting division to Insurance Australia Group (IAG). WES shares are firmer by one per cent to $41.97 with the company saying the deal should net it between $310-335 million in pre-tax profit. IAG is slightly firmer at $5.60 a share.
Retailer Harvey Norman (HVN) is trading without rights to its dividend today, sending its share price lower by almost four per cent to $3.15. Shareholders will receive a six cent per share dividend franked at 100 per cent.
Good news on the jobs front with a leading indicator showing a jump in the number of jobs advertised in March. The ANZ series showed a 1.4 per cent gain in total jobs advertised in March from February. Newspaper job ads were up 4.5 per cent in the month while there was a 1.3 per cent lift in the number of jobs advertised online.
Official March employment numbers are due on Thursday. We are tipping 11,000 jobs were created in the overall economy last month.
At midday in the East, the Australian dollar is buying US92.89c.
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