Australian Stock Market Report – Afternoon June 4, 2014
By Juliette Saly, CommSec Market Analyst | June 4, 2014 6:06 PM EST
The Australian share market was sold off again on Wednesday, despite solid economic growth figures for the March quarter.
The Australian economy grew by 1.1 per cent in the March quarter, the fastest rate of growth in two years, following a 0.8 per cent increase in the December quarter. The economy has grown 3.5 per cent over the past year, above the decade-average growth rate of 2.9 per cent and the 15 year average of 3.1 per cent.
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.
Mining, energy and financial players were all heavily sold off on Wednesday, as investor gloom prevailed.
Every sector ended in the red despite the property trust sector, which rose 0.8 per cent following a foreign takeover offer for Australand (ALZ). Securities in ALZ rose 5.6 per cent to $4.55 as Singapore property developer Frasers Centrepoint offered $2.59 billion in cash for the company, trumping Stockland's (SGP) $2.5 billion proposal. ALZ's board said it intends to recommend the new offer if no superior offer is made. SGP shares rose 1.8 per cent to $4.01.
Retailer Non B (NBL) also rallied thanks to takeover talk. NBL closed higher by almost 45 per cent to 56.5 cents following news the Kindl family which own a 40 per cent stake in the struggling company have spoken to independent reviewers of NBL who are reviewing takeover approaches. In May, NBL announced it would post an annual loss of between $1.8 to $2.2 million.
CommSec thinks that the Reserve Bank could start lifting interest rates late this year or early next year. But at present there is no rush. The "speed limit" of the economy is around 3.5-4.0 per cent. After hitting 3.5 per cent growth this quarter, growth will probably ease to around 3.25 per cent in the June quarter. In short, good growth for job creation but not fast enough to boost inflation.
A total of 1.9 billion shares changed hands today, worth $4.3 billion. 391 were up, 550 were down and 381 were unchanged.
Ahead tonight, the ISM services gauge and ADP employment report are released.
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily
Join the Conversation
- Product Recall: Graco Recalls Baby Strollers in Canada, U.S. Due To Amputation Risks
- Travel Alert: New Delta Air Lines Airbuses Could Be Seen In Australia Soon
- Travel Alert: Frequent Flyer Tie-Up Between Virgin Australia, South African Airways Enhanced
- Australian Stock Market Report –Afternoon November 21, 2014
- Australia, NZ Ditch Proposed Joint Therapeutic Products Agency