Australian Stock Market Report – Afternoon 5/20/14
By Steven Daghlian, CommSec Market Analyst | May 20, 2014 5:22 PM EST
Local stocks recovered this afternoon, managing to rise slightly for the first time in three trading sessions. Continued concerns about an oversupply of iron ore and weaker than expected property price growth in China was put to one side, following Monday's 1.3 per cent plummet.
BHP Billiton. (Reuters)
The miners recovered late despite the continued slide in the iron ore price. BHP Billiton (BHP) managed to rise 0.05 per cent, Rio Tinto (RIO) lost 0.1 per cent and Fortescue Metals (FMG) recovered most of yesterday's losses, improving by 3.89 per cent. Three of the big four banks finished slightly higher.
Amongst ASX200 companies, Treasury Wine Estates (TWE) and Sirius Resources (SIR) were standouts. TWE surged 19 per cent after rejecting a $4.70/share, $3.05 billion takeover offer from a U.S. based private equity firm called KKR. TWE now trades 2 per cent above the bid at $4.80. The wine company behind brands like Penfolds announced its plan to drive profit growth through 'increased investment in consumer marketing, to be funded by a comprehensive overhead and cost reduction program" in an announcement to the market. It expects to produce $35 million in costs savings next financial year, with staff cuts likely.
WA based exploration company, Sirius Resources (SIR) rose by 4 per cent after the Goldfields Lands and Sea Council advised that "the Ngadju claim group, who are the traditional custodians of the land covering the Nova Nickel Project, have agreed to provide the necessary consent..." for a mining lease.
On the economic front, the minutes from the Reserve Bank's May monetary policy meeting were released. The RBA is showing no urgency in changing the rate setting, with rates remaining at 2.5 per cent since mid-2013. Spending has jumped for the 21st month across the economy according to the Commonwealth Bank Business Sales Indicator. Retailers ended mostly firmer today.
By the close, 1.79bn shares were traded worth $4.51 billion. 448 stocks finished firmer, 482 in the red and 388 were unchanged.
The Australian dollar fell to a two-week low today and now buys US92.7c. Comments from Guy Debelle, RBA Assistant governor, that the Australian dollar is more likely to drift lower rather than higher over the medium term, the RBA minutes and a warning from ratings agency S&P that Australia's AAA credit rating could be reviewed were all in focus today.
Tonight, two of the 12 Federal Reserve Presidents will be delivering talks in the U.S. Commentary from U.S. central bank officials tends to attract at least some attention from markets.
Tomorrow, a consumer sentiment reading for the month of May and a quarterly read on wages will both be issued in Australia. Adelaide Brighton (ABC) will be holding its AGM.
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily
Most Popular Slideshows
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- NFL Thursday Recap - Denver Broncos 35, San Diego Chargers 21: Peyton Manning Has 3 TDs In Easy Win [PHOTOS]
- 2014 MLB World Series Game 3: Kansas City Royals 3, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- Verizon Motorola Droid Turbo Leaked Live Images Surfaces, Scheduled To Get Unveiled On Oct 28
- Update HTC One M7 with LG G2 with Android 4.4.2 as Sprint OTA: Fixes and Installation
- U.S. Targets Buyers of ISIS Oil, Threatens Sanctions
- ISIS Syria Airstrike Bombing Has Killed 550 People, Civilians Included
- Russia Blocking OSCE Monitoring Of Its Border With Ukraine
- Russia Slams US 'Double Standards' In The Fight Against ISIS