Market Wrap: ASX rises before US debt ceiling deadline

Market Reports

The Australian share market has finished the session and week stronger and scaled a new five-year closing high above the 5,300 barrier. 
 
Local stocks shrugged off ongoing concerns over the US Federal Reserve’s timeline for tapering economic stimulus. Investors also brushed aside fears of a possible US default as the impending debt ceiling deadline approaches on October 1 and the US budget battle intensifies. 
   
In the week ahead Australian investors will also be keeping an eye on our central bank’s monthly interest rates decision. Expectations are the Reserve Bank of Australia (RBA) will hold its fire and keep the key cash rate unchanged at a record low of 2.5 per cent when it meets next Tuesday. 
 
Figures
 
The S&P/ASX 200 index rose 12.6 points today, widening the weekly gain of 30.4 points to finish the week at 5,307.  
 
The value of trades was $6 billion on volume of 668 million shares at the close of trade. 
 
The top three stocks by value were Commonwealth Bank of Australia (ASX:CBA), BHP Billiton Limited (ASX:BHP) and National Australia Bank Limited (ASX:NAB)
 
On the futures market the SPI is 5 points higher.
 
Wall Street
 
US stocks have lost ground over the four trading days this week: The Dow Jones Industrial Average has lost 308 points, the S&P 500 Index has lost 24 points, the Nasdaq has lost 2 points and the 100 Index has lost 4 points. 
 
Economic news
 
Australia’s budget deficit in the last financial year has come in better than expected. The new Liberal Government’s Federal Treasurer Joe Hockey’s Budget Outcome today revealed an underlying cash deficit of $18.8 billion in the 2013 financial year, an improvement from a $19.4 billion deficit forecast in May 2013. While Mr Hockey has predicted the current year’s budget deficit will be worse than Labor's forecast of a $30.1 billion deficit the Liberal government’s exact projected figure has not been disclosed as yet.  
 
Company news
 
The founder of Fortescue Metals Group Limited (ASX:FMG) Andrew Forrest has stepped down as Chairman of Poseidon Nickel Limited (ASX:POS). The departure comes ahead of an $8 million bridging loan repayment deadline the junior mining company must settle with the mining billionaire by October 1, 2013. Poseidon Nickel has told the market Mr Forrest has resigned due to his “overwhelming philanthropic duties”. Shares in Poseidon Nickel last traded at $0.14 before entering into a trading halt. 
 
Shares in Mirabela Nickel Limited (ASX:MBN) shed more than half their value after announcing one of its two customers plan to shut down its smelting facilities due to adverse nickel market conditions. The mining company was expecting the contract to run until the end of 2014 but the sales deal will now end in November 2013. Mirabela Nickel has also cast doubt over a recovery in nickel prices and noted the possibility of continued weakness into 2014. Shares in Mirabela Nickel plunged 59.02 per cent today, ending the week at $0.03. 
 
Executive pay
 
Virgin Australia Holdings Limited’s (ASX:VAH) chief’s annual pay packet shrunk 2 per cent to $2.7 million in the same year Australia’s second largest carrier’s booked a net loss of $98 million. CEO John Borghetti’s remuneration was impacted by the loss of almost $1 million in long-term incentives in the same period the chief of rival Qantas Airways Limited (ASX:QAN), Alan Joyce, took home an increased salary of $3.3 million. Shares in Virgin Australia Holdings ended the week 2.35 per cent higher at $0.43. 
 
Harvey Norman Holdings Limited’s (ASX:HVN) founder and Chairman Gerry Harvey’s annual pay check has remained broadly unchanged though the electronic retailer’s net profit fell 17.5 per cent in the 2013 financial year. Mr Harvey's base salary came in at $723,000, which when added with cash incentives came to just over $1 million, while his stake in the company is currently valued at about $1 billion. Shares Harvey Norman Holdings ended the week 0.31 per cent lower at $3.24.

Best and worst performers 
 
The best performing sector was health care adding 153 points to close at 13,873. The worst performing sector was financials excluding real estate investment trusts, easing 8 points to close at 6,890 points.
 
The best performing stock in the S&PASX 200 was Senex Energy Limited (ASX:SXY), rising 3.33 per cent to close at $0.78. Shares in Energy World Corporation Limited (ASX:EWC) and Worleyparsons Limited (ASX:WOR) also closed higher.
 
The worst performing stock was Perseus Mining Limited (ASX:PRU), dropping 3.54 per cent to close at $0.55. Shares in Newcrest Mining Limited (ASX:NCM) and Sirius Resources NL (ASX:SIR) also closed lower. 
 
Commodities
 
Gold is trading at $US1,327 an ounce, down $37.09 over the week. 
Light crude is $0.37 higher at $US103 a barrel. 
 
The Australian dollar
 
The Australian dollar is buying 93.67 US cents, down $0.009 over the week.