Australian Stock Market Report –Afternoon July 11, 2014

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By Juliana Roadley, CommSec Market Analyst | July 11, 2014 7:34 PM EST

People walk past an office of Portuguese bank Banco Espirito Santo in Lisbon June 20, 2014. The founding family of Banco Espirito Santo has accepted their patriarch Ricardo Espirito Santo Salgado must step down as chief executive of the bank, proposing chief financial officer Amilcar Morais Pires as his successor.REUTERS/Rafael Marchante (PORTUGAL - Tags: POLITICS BUSINESS)
People walk past an office of Portuguese bank Banco Espirito Santo in Lisbon June 20, 2014. The founding family of Banco Espirito Santo has accepted their patriarch Ricardo Espirito Santo Salgado must step down as chief executive of the bank, proposing chief financial officer Amilcar Morais Pires as his successor.REUTERS/Rafael Marchante (PORTUGAL - Tags: POLITICS BUSINESS)

End of Day Report (4.50pm)

After an erratic night of trading in Europe and the US the Aussie market started weaker but within the first 2 hours of trade managed to rally out of the red.

Overnight concerns over the stability of the Portuguese banking system rocked international markets, European markets lost ground and the Dow Jones Index started down 150pts. As news from the Portuguese central bank and other sources stated to filter through in support of the major bank at the centre of the scare Banco Espirito Santo Us markets cut early losses. In the Asian banking session today more positive news was released in support of Banco Espirito Santo which helped lift our markets and our banking sector closed stronger after Reuters reported that Banco Espirito Santo believes any potential losses from companies of the bank´s founding family would not put at risk its ability to meet minimum required capital ratios.
The All ordinaries Index added 20points to 5474.6 points with most sectors closing higher.
The banking sector moved higher throughout the day helped by the large name insurers. Insurance Australia Group Ltd (IAG) added 2.2% and QBE Insurance Group (QBE) up 1.8%, while our big four banks closed slightly higher.

Property trusts started off well and then fell away as money moved out of defensive stocks as the market regained confidence. Mirvac Group (MGR) ended lower off 0.84% and GPT Group (GPT) off 1%.

In company news.
The newly formed Scentre Group (SCG) which was created following the
Westfield restructure closed higher after a successfully European debt raising of $3Billion this week and finished the day up 0.6%

Fortescue Metals (FMG) today pre-released its production data ahead of its quarterly report on Wed July 16th. The numbers are weaker than expected. FMG has shipped 124.2Mt for FY14, which is below guidance of 127Mt this was partly to do with bad weather. FMG shares closed down 0.23%. BHP Billiton Limited (BHP) closed slightly however Rio Tinto Limited (RIO) fell nearly 0.5%.

Santos (STO) today announced that oil production has commenced from the Dua oil project, in offshore Vietnam STO said its gross production rate from the Dua wells is estimated to average 8,000 barrels per day in first 12 months.

In economic news
The number of new owner-occupier housing loans was largely unchanged in May. However the number of loans to build homes by owner occupiers rose by 0.9% in May. In trend terms construction loans rose by 0.5% to 6,229 in May (a 52-month high). The share of first-time buyers in the market lifted from record lows of 12.3% of all loans to 12.6% in May. The value of new housing finance commitments (owner occupier and investment) fell by 0.8% in May with owner-occupier loans down 0.7% while investment loans fell by 0.9%.

The Australian dollar traded in a very tight range over the last week and today closed our session at AUD/USD 0.9387

Tonight in the US the Federal Budget Statement will be realised for the month of June, market consensus for this result is for a Surplus of US$96billion.

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(Photo: / )
People walk past an office of Portuguese bank Banco Espirito Santo in Lisbon June 20, 2014. The founding family of Banco Espirito Santo has accepted their patriarch Ricardo Espirito Santo Salgado must step down as chief executive of the bank, proposing chief financial officer Amilcar Morais Pires as his successor.REUTERS/Rafael Marchante (PORTUGAL - Tags: POLITICS BUSINESS)
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