Australian Stock Market Report – Midday June 16, 2014

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By Tom Piotrowski, CommSec Market Analyst | June 16, 2014 1:09 PM EST

Mid Session Report
(12:30 AEST) 

Sellers have been on the front foot in early trade on Monday, the market moved quickly to the 5380 area at the start of the session, although buyers have been able to defend the level thereafter.


Australia's ASX outshines regional indices in the week ending 28 September (Reuters).

One of the main themes of the week will be to see how the ASX 200 performs around the 5400 level. One of the redeeming features of Friday's session was the fact that the index was able to recover having broken through the key support level.

Commodity stocks remained in focus on Monday, with oil prices remaining in the range of 9 month highs on supply concerns as tensions escalated in Iraq. Base metals finished higher at the end of last week on demand hopes after China's industrial production rose in May, alleviating concerns of declining industrial activity in the short term. Iron ore declined by 0.7% to USD90.90/t (CFR China) on concerns
that an investigation into the fraudulent use of commodities as collateral for loans at the Chinese port of Qingdao could see iron ore inventory financing demand wane. Despite the falls for iron ore the performance of the bulk miners was better than anticipated under the circumstances. BHP Billiton (BHP) was able to trade higher at $35.40 a gain of 11 cents or 0.31% thanks to its energy exposure.

Since the Federal budget was handed down investors have been wary of the retail sector as consumers reel in spending habit. Super Retail Group put paid to that caution on Monday trimming its full year profit forecast, pointing the finger at the Federal Budget for hurting sales across its businesses. The owner of Supercheap Auto, BCF - Boating Camping Fishing chain, Rays Outdoors, and Workout World amongst others followed profit warnings by other retailers, such as The Reject Shop and Pacific Brands, who have been hurt by the tough spending cuts outlined in the federal budget and warm weather. Shares in The Super Retail group (SUL) were up by more than 0.5% having fallen by 12% over recent weeks. Managing director Peter Birtles said group net profit was expected to rise by about five per cent to between $107 million and $109 million for the year.

Casino operator Echo Entertainment (EGP) was a standout in a falling market. The group expects a normalised net profit of between $150 million and $153 million for the financial year compared to $83.5 million in 2012/13. Earnings before interest, tax, depreciation and amortisation (EBITDA) to rise to between $430 million and $435 million, from $372.9 million. Shares in Echo were 20 cents, or 7 per cent, higher at $2.97 

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Australia's ASX outshines regional indices in the week ending 28 September (Reuters).
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