Australian Stock Market Report – Midday August 13, 2014
By Craig James, CommSec Chief Economist | August 13, 2014 2:57 PM EST
ASX 200 builds on Monday's gains
The ASX 200 started the second session of the week on the front foot with the index happily building on the previous day's gains. The market was trading close to session highs at lunchtime with a gain of points 55 points after US stocks held their recently improved tone into the start of the week overnight.
Traders work on the floor of the New York Stock Exchange shortly after the market's opening in New York July 28, 2014. REUTERS/Lucas Jackson
One of the early improvers was Domino's Pizza (DMP) after the group reported a 50.4 per cent lift in underlying net profit to $45.8 million. The acquisition of the Japanese franchise saw revenue nearly double to $588.7 million. Same store sales rose 5.8 per cent helped by the introduction of new products .The company announced a fully-franked final dividend of 19 cents per share taking the full year distribution to 36.7 cents, up from 30.9 cents in 2013. DMP shares were up 6.7 per cent a short time ago.
Consumers Staples were the main laggard in a rising market. The group was held back by Woolworths (WOW) after the retailer said that its home improvement business faced more headwinds with a warning of more losses. WOW said that losses in the Masters hardware chain, amongst others, will exceed those seen the previous year and as a consequence will miss its target of breaking even in 2016. The home-improvement division overall is expected to post an operating loss of $169.0 million in the year to June compared to an earlier forecast which saw losses from hardware being no worse than the $138.9 million reported last year. Woolworths remains committed to the expansion of the business by opening new stores with particular attention to metropolitan areas. WOW shares were down by 1 per cent.
Economic news provided encouraging figures; business confidence rose to 11 points in July from eight points in June, according to NAB's monthly business survey. Elsewhere, figures revealed that the housing market continues to respond to low interest rate settings. Housing prices rose more than expected in the 3 months to the end of July with the average price of houses across Australia's capital cities rising 1.8% in the 2nd quarter compared to the first 3 months of the year. Economists had expected prices to rise by 1% in the period. House prices rose 10.1% from the same quarter a year earlier, according to the ABS. Sydney house prices rose 3.1% from the preceding quarter and 15.6% on year. Perth was the only centre to record a fall, with prices easing 0.2% on quarter and a rise of 3.6% on year.
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