Australian Stock Market Report – Midday 4/8/14
By Steven Daghlian, CommSec Market Analyst | April 8, 2014 12:56 PM EST
The Australian sharemarket is losing ground for the second day, with the All Ordinaries Index (XAO) down 0.4 per cent and trading below the 5400pt level. Local shares are now down by just 0.16 per cent so far in April; however are still 0.75 per cent firmer since the start of this calendar year. Volume was significantly held back yesterday due to a Chinese public holiday. Sharemarkets in China are resuming normal trade today. U.S. stocks slumped for the third day overnight, with the tech specific NASDAQ suffering its worst three-day slump in around three years.
Tim Wimborne / Reuters
People look at market display indicators through the window of the Australian Stock Exchange in Sydney
Last night Australia and Japan finally agreed on a Free Trade Agreement (FTA); something which has been in the works since 2005. The U.S. has failed to negotiate a similar deal. Perhaps the lack of an Australian automotive industry made the negotiations easier for both parties.
Among the major beneficiaries of this trade agreement are both beef and dairy producers. Australian producers of beef are currently charged a 38.5 per cent tariff on imports; however this is expected to be cut to 19.5 per cent for frozen beef and 23.5 per cent for fresh beef (over 15 years). One of the country's biggest beef producers, Australian Agricultural Company (AAC), is up by 4.45 per cent. AAC is now 3.2 per cent firmer this calendar year and is having its best day of 2014.
Cheese is one of Australia's bigger exports to Japan and is expected to increase by as much as 70 per cent thanks to the FTA. NSW based dairy company, Bega Cheese (BGA) is up 0.5 per cent at lunch, taking the gains so far this year to 11.2 per cent.
Treasury Wine Estates (TWE) is one of the better performers at lunch, with its shares up 6.4 per cent. TWE's wine portfolio includes Penfolds, Lindemans, Wolf Blass, Rosemount Estate and Beringer. TWE's new Chief Executive Michael Clarke formally addressed the market on his initial impressions of the wine business this morning. He said that "Given a global market where consumers are increasingly demanding high quality wines at higher price points, TWE's strategy of premiumisation is the right one. The Company has an appetite for growth and a balance sheet to support these ambitions."
On the economic front, the results of the monthly NAB Business Confidence were issued at 11.30am (AEDT). Confidence has slipped from 7.0 to 4.0 this month. A reading above 0.0 still shows that businesses are more optimistic than negative. Conditions have improved modestly.
At lunch, 624.6 million shares have changed hands worth $1.08 billion. 234 stocks are up, 459 are in the red and 288 are unchanged.
The Australian dollar has improved this morning; currently buying US92.75c.
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily
Most Popular Slideshows
- George Clooney And Amal Alamuddin's Wedding In Venice: Photos Of Groom And His Family, Friends [Slideshow]
- NFL Recap - Week 4: Green Bay Packers 38, Chicago Bears 17 [PHOTOS]
- Walking Is Superfood For Fitness; Celebrities Who Walk For Health
- Derek Jeter With The New York Yankees Through The Years [IN PICTURES]
Join the Conversation
- 3 Reasons to Get the Samsung Galaxy Note 4 Instead of the iPhone 6
- iPhone 6 vs Moto G 2014: Motorola’s Budget Smartphone Takes On Apple’s Premium Smartphone
- Google HTC Nexus 9 Tablet October 24 Launch Date Benefits Many
- Galaxy Note 4 vs Nexus 6: Which Smartphone Dominates
- MH 370 Search In Ocean To Intensify With Hi Tech Ships Joining The Plane Hunt From October
- Nexus 7 Tips and Tricks
- Obama’s Bid To Blame Intelligence Chief For Inaction On ISIS Backfires: McCain Asks Obama To Admit Own Mistakes