Australian Stock Market Report – Afternoon 2/4/2013

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Afternoon Market Report (17:30 AEDT)

A flurry of buying for local stocks at the beginning of the session failed to translate to anything more substantial on Monday. By the close of trade the market was close to the lows of the session. The main factor at play was the lack of a catalyst as the market traverses the region around the 5000 market. The ASX200 opened at 4927.2, traded at a high of 4951.3, made a low of 4907.5 which was where the index closed.

There were 1.8 billion transactions valued $4 billion. 482 stocks finished higher , 535 were lower and 370 were unchanged. The 5000 remains a significant hurdle for the index. The market was last at this level 2 years ago and it seems likely that a substantial catalyst will be required to escape its gravity. Conveniently a substantial event looms, the local reporting season. Over the remainder of the month it will become evident whether the local market will continue the trend that has been in place since the middle of last year.

The local picture was devoid of any game changing outcomes on Monday. Most sectors ended lower although on balance the moves were rather modest. Financials could be fairly described as being the main weak point. The RBA makes its first interest rate decision of the year on Tuesday and there is a growing sense that the improved conditions in Europe, China and the US will be a significant factor in staying the central banks hand for at least the 1st half of 2013. Commonwealth Bank of Australia fell 0.52 per cent to $64.71, Westpac dropped 1.27 per cent to $27.94, ANZ fell 0.71 per cent to $26.55, National Australia Bank went counter trend lifting 0.18 per cent to $28.05, Macquarie Group fell 1.43 per cent to $38.73.

Mining and energy stocks , similarly attracted the attention of sellers in general terms. BHP Billiton fell 0.29 per cent to $37.81.Fortescue Metals Group closed flat at $4.79, Whitehaven Coal rose 0.92 per cent to $3.29, Newcrest Mining eased 0.51 per cent to $23.51. Rio Tinto rose 1.18 per cent to $67.99 after the.the W.A government approved the group's plans to expand it's iron ore operations in the Pilbara.

Amongst the retailers price moves were modest overall Wesfarmers eased to $37.61,a fall of -0.50%, Woolworths ended at $31.61 a gain of 0.64%,JB HI-FI was flat at $9.99, Harvey Norman was unchanged at $2.03, David Jones dropped 1.19% to $2.49, Myer closed at $2.46, unchanged.

The December employment report which will be released on Thursday could prove to be a catalyst in the event of a better than expected reading. A prelude to the report came today in the form of the ANZ job ads series. The combined number of internet and newspaper job advertisements, as tracked by ANZ, fell for the 11th straight month, dropping by 0.9 per cent in January after a 2.8 per cent decline in December. Job ads are down 18.4 per cent on a year ago to 133,649 and are holding at the lowest levels since January 2010. Newspaper job ads fell by 9.2 per cent in January while the far larger component of internet job ads fell by 0.6 per cent.

Elsewhere, Dwelling approvals fell by 4.4 per cent in December, after a rising 3.4 per cent in November (revised up from 2.9 per cent rise). Economists had tipped a 1 per cent lift in approvals. The number of approvals is just four per cent below decade averages. The modest fall in December building approvals present no problem , especially given that the November result was revised higher. In fact the 4.4 per cent fall in December effectively negates the prior months 3.4 per cent gain. The approvals numbers tend to be volatile from month to month. However there is a clear underlying improvement taking place. In fact approvals are up just shy of 10 per cent over the year and coupled with the recent upbeat new homes sales figures it is clear that the housing sector is gathering momentum.

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