The Australian share market recovered in afternoon trade to finish slightly ahead, as investors welcomed the first piece of optimistic news out of the US in 8 days, with Janet Yellen’s likely nomination to succeed Ben Bernanke as Fed chairman improving sentiment that the US will instill a governor committed to ensuring sustainable economic growth. Locally, the major sectors finished mixed, with Materials stocks posting the strongest gains.
The S&P/ASX 200 index closed 4 points up to finish at 5,153. The value of trades was $3.5 billion on volume of 609 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited
(ASX:BHP), Westfield Group
(ASX:WDC) and Commonwealth Bank of Australia
(ASX:CBA).
On the futures market the SPI is 2 points down.
Economic news
The Westpac-Melbourne Institute’s Index of Consumer Sentiment fell by 2.1 per cent to 108.3 in October, backtracking from 110.6 in September. Westpac chief economist Bill Evans says the result is solid despite the decline, with the index remaining 9.2 per cent above its level a year ago.
Australia's economic growth prospects have been downgraded by the International Monetary Fund (IMF) due to the nation's vulnerability to slower Chinese demand for commodity exports. In its World Economic Outlook, the IMF forecast Australian growth of 2.5 per cent in calendar 2013, down from a 3 per cent forecast in April. For 2014, the IMF sees Australian growth at 2.8 per cent, rather than 3.3 per cent.
Company news
Resource services company Worleyparsons Limited
(ASX:WOR) has flagged declining earnings in the current half following a quiet period of order flows. CEO Andrew Wood says earnings in fiscal 2014 will be more biased to the second half than in recent years, and shareholders didn’t enjoy the news, sending shares down 6 per cent on the news, following an earlier gain of more than 2 per cent. Shares in Worleyparsons closed 2.9 per cent down at $22.10.
FKP Property Group
(ASX:FKP) has settled the $31.5 million sale of 399 Lonsdale Street in Melbourne, a 10 level commercial property. The company has also settled the sale of an englobo parcel of industrial lots in Mackay for $25 million, and plans to use the proceeds from the two transactions to repay debt as it evolves to a pure retirement group. Shares in FKP closed 1.65 per cent up at $1.54.
OceanaGold Corporation
(ASX:OGC) shares slipped 4.32 per cent despite announcing it will buy Canadian gold miner Pacific Rim Mining Corp in a deal valued at $10.4 million.
Toll Road operator Transurban Group
(ASX:TCL) shares gained 1.76 per cent after it recorded a strong rise in revenue for the September quarter, on the back of the completion of upgrades to Sydney’s M2 Motorway.
Newcrest Mining Limited
(ASX:NCM) has appointed director Peter Hay to replace Don Mercer as chairman when he departs in December, while former Rio Tinto Limited
(ASX:RIO) executive Sandeep Biswas as its new Chief Operating Officer, to come on board at the beginning of next year.
Virgin Australia Holdings Limited
(ASX:VAH) shares firmed 1.19 per cent after the carrier inked a $60 million, five year telco services agreement with Singapore Telecommunications Limited (CHESS)
(ASX:SGT) owned Optus.
Best and worst performers
The best performing sector was Materials adding 22 points to close at 9,473.
The worst performing sector was Healthcare, losing 89 points to close at 13,632.
The best performing stock in the S&PASX 200 was CuDeco Limited
(ASX:CDU), rising 9.7 per cent to close at $1.98. Shares in Atlas Iron Limited
(ASX:AGO) and Sirius Resources N.L.
(ASX:SIR) also closed higher.
The worst performing stock was Paladin Energy Limited
(ASX:PDN), dropping 5.43 per cent to close at $0.43. Shares in Silver Lake Resources Limited
(ASX:SLR) and Linc Energy Limited
(ASX:LNC) also closed lower.
Commodities
Gold is trading at $US1,318.50 an ounce. Light crude is $0.46 up at $US103.49 a barrel.
The Australian dollar
The Australian dollar is buying $US0.9436.
