Sponsorship Link
MARKET CLOSE
(4.30pm AEDT)
Following the first week of losses for the Australian sharemarket in 2012 last week, shares kicked off trade today significantly higher. The All Ordinaries index (XAO) rose by 1 pct or 44.5 pts to 4364.6. Almost all sectors improved however the defensive healthcare space fell by 0.4 pct.
/
Today's gains came to us courtesy of the Americans, after a much better than anticipated economic report on jobs last Friday night gave markets globally a much needed boost.
The major banks all gained ground, with National Australia Bank (NAB) up 1.77 pct or 42 cents to $24.17, Westpac (WBC) gained 1.15 pct or 24 cents to $21.03, ANZ Banking Group (ANZ) improved by 1.04 pct or 22 cents to $21.33 and Commonwealth Bank (CBA) edged higher by 0.53 pct or 27 cents to $50.84.
Australia's largest retailers, including David Jones (DJS) and Harvey Norman (HVN) both improved while Myer (MYR) ended 1.86 pct or 4 cents lower to $2.11.
Must Read
Follow us
BHP Billiton (BHP), Australia's largest miner rose 1.62 pct or 61 cents to $38.21 today. The materials giant is currently trading at its highest level since November 9, when the stock closed above $38 for only one session, prior to a significant pullback.
The Australian earnings (profit) season kicks off this week, with inner ear implant maker Cochlear (COH) releasing its profit results tomorrow. COH shares are relatively unchanged ahead of the result and gained by only 0.19 pct or 11 cents to $58.11. On Wednesday, BHP Billiton (BHP), will issue its numbers and on Thursday, Newscorp (NWS), Telstra (TLS) and RIO Tinto (RIO) will all be announcing their latest results. Typically, week one of the earnings season is relatively quiet in terms of the sheer number of companies reporting. The number of results pick up in week two and reach a peak in week three.
Tomorrow, the Reserve Bank of Australia (RBA) will make its decision on interest rates. The market is expecting rates will be cut by 25 bps (0.25 pct) to 4 pct.
On the economic front today, the latest report on the number of jobs advertised in January was released in addition to the monthly inflation gauge and the latest update on retail spending patterns.
Australian consumers are still keeping their dollars away from retail stores, with retail spending falling by 0.1 pct in December. In 2011, retail sales rose by just 2.5 pct which is close to the slowest growth rate in 50 years.
Commsec Economist, Savanth Sebastian said that "Across the states sales rose in just Victoria (up 1.5 per cent) and the ACT (up 1.8 per cent). Sales fell the most in the Northern Territory (down 2.6 per cent), followed by Queensland (down 1.4 per cent), South Australia and Western Australia (down 0.7 per cent), NSW (down 0.2 per cent) and Tasmania (down 0.1 per cent)." Last year's rate cuts do not seem to have had their desired impact on boosting consumer spending.
The latest inflation gauge has clearly confirmed that inflation is largely under control at the moment, with only a 0.2 pct rise recorded in January.
Mr Sebastian said that "Interestingly the latest figures have highlighted the widespread discounting taking place, ensuring a raft of cheaper goods. In fact four of the 15 retail industries recorded a fall in prices in the December quarter. Food, fruit & vegetables, pharmaceutical, and electrical good outlets are all experiencing deflation falling prices. No doubt the higher Australian dollar is also playing a key role. In fact retail inflation grew at just 0.1 per cent in the December quarter - marking the weakest quarterly price growth in over two years."
On a positive note, employers picked up advertising for new jobs last month by 6 pct. Advertising in newspapers has continued to pullback however online ads increased significantly in January following on from the slump during the December holiday period.
