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MARKET CLOSE (4.30pm AEST)
The energy and mining sectors were the best performers yesterday, but it was a very different story today, with both sectors holding the market back. The ASX 200 index (XJO) fell 1.8 pct or 84.1 pts to 4696.1 while the broader All Ordinaries index (XAO) slumped by 1.7 pct or 81.6 pts to 4776.6.
The S&P/ASX 200 Materials index fell 2.57 pct or 355.2 pts to 13482.1, off the back of weaker commodity prices overnight in U.S trade. Australia’s largest miner, BHP Billiton (BHP) dropped 2.58 pct or $1.17 to $44.13 while RIO Tinto (RIO) fell 2.04 pct or $1.66 to $79.79.
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Australia’s largest steel company BlueScope Steel (BSL), said it will report a small net loss for the second half of this financial year, with profit hurt significantly by a much stronger Australian dollar, less demand and lower steel prices. The good news for its shareholders today however, was that the market was expecting a worse result. BSL shares rose 1.95 pct or 3 cents to $1.56.
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The S&P/ASX 200 Telecommunication Services index fell 0.25 pct or 2.5 pts to 1013.7 after a strong start to the day. Singapore’s largest telecommunication company, Singapore Telecommunications (SGT) rose 2.13 pct or 5 cents to $2.40 after releasing its full year profit results today. Profit fell by 2 pct to an equivalent Australian dollar amount of $2.8 billion. Optus, which SGT owns was one of the company’s standouts after earnings rose 15 pct for the 12 months to March 2011.
Australia’s largest airline, Qantas (QAN) ended 0.93 pct or 2 cents lower to $2.12 after the 1 hour strike planned for tomorrow was called off at around midday today. This means that the 31 flights which were expected to be cancelled in addition to the 46 expected to be delayed should run to schedule on Friday.
The S&P/ASX 200 Financials index fell 1.5 pct or 67.2 pts to 4424, with ANZ Banking Group (ANZ) ending lowest after the company went ex-dividend today. This means you would have needed to purchase ANZ shares no later than yesterday to be eligible for its 64 cent a share dividend scheduled to be paid on July 1.
On the economic front in Australia today, the Australian Bureau of Statistics (ABS) released its latest monthly employment report at 11.30am (AEST). Employment fell by 22,100 in April, making it the biggest decline in almost 2 years with all the falls coming from full-time positions.
The number of full-time jobs fell 43,300 in April, while part-time jobs rose 26,900. The unemployment rate remained unchanged at 4.9 pct.
Commsec Economist, Savanth Sebastian said that “The rapid fire rate hikes and sluggish consumer activity is starting to show cracks in the labour market data. More and more businesses are telling us that conditions are tougher now than at the height of the global financial crisis and earlier this week the NAB business survey highlighted the weakness in business trading conditions. Profitability is being squeezed and forward orders are being pared back – all a clear sign that businesses are finding times tough.”
The Reserve Bank of Australia (RBA), also reported on the latest monthly credit card statistics. The average credit card balance in March remained relatively flat at $3,321. While there has only been a very modest 2.3 pct rise in credit card balances over the past year, purchases made using debit cards have jumped 20.5 pct.
Mr Sebastian commented on the above credit card statistics by saying that “Aussie consumers are increasingly using their own money (debit cards) to make purchases rather than put them on credit. Purchases made on using debit cards are up almost 21 per cent on a year ago, while purchases made on credit card have grown by just over 3 per cent compared with a year ago.”
Out of Asia, yesterday was China’s biggest day of the month for economic releases while today was Japan’s moment in the spotlight.
