The Australian share market headed south this morning but has since clawed back to almost where it started the session.
Investors are absorbing implications from the US Federal Reserve’s economic outlook and decision to maintain its economic stimulus program. While Wall Street fell in response the major indices are still at near all-time highs with the Dow and S&P 500 even closing at record highs this week.
Closer to home, most sectors are stronger. Health care has been aided by Mesoblast Limited’s
(ASX:MSB) stock surge while energy and mining stocks are also making gains. On the flip-side financials have fallen after National Australia Bank Limited’s
(ASX:NAB) full-year cash profit disappointed, despite increasing 9.3 per cent to a record $5.9 billion.
Figures
The S&P/ASX 200 index is trading 3 lower at 5,428. On the futures market the SPI is 3 point lower.
Economic headlines
The Australian Bureau of Statistics reports building approvals for the construction of new homes climbed 14.4 per cent last month, beating expectations for a 2.8 per cent rise. Over the year to September building approvals have now surged 18.6 per cent.
Australia’s third-largest lender has predicted property prices will continue climb from now until the end of 2015. ANZ Banking Corporation
(ASX:ANZ) analysts, led by David Cannington, expect a 15 to 20 per cent lift in home prices over the next 2.5 years.
A new index compiled by CommSec shows housing bubble hype has now reached levels not seen for a decade. The index started in January 2003 and tracks when the phrase “housing bubble” appears in Australian media. The phrase hit a 10-year high last month when CommSec found 194 mentions of the housing bubble, compared to 201 mentions in September 2003.
Market movers
Shares in Mesoblast Limited
(ASX:MSB) have jumped 12.29 per cent after the regenerative medicine company revealed the US Food and Drug Administration (FDA) has given clearance for Phase 3 trials to start in patients with chronic congestive heart failure using Mesoblast’s proprietary cells.
Shares in Lynas Corporation Limited
(ASX:LYC) have risen 4.48 per cent after rare earths producer posted a 76 per cent increase in September quarter production and an 86 per cent increase in shipments from its Malaysian operations.
Shares in Qantas Airways Limited
(ASX:QAN) have dipped 1.19 per cent with Australia’s biggest airline confirming today it will boost its stake in Jetstar Japan through pouring in an extra $60 million of fresh equity to support the low-coast carrier’s growth aspirations.
Shares in Retail Food Group Limited
(ASX:RFG) have dropped 2.84 per cent after the owner of Donut King and Brumby’s Bakeries announced it has raised $53 million to fund growth and potential acquisitions.
Shares in Bega Cheese Limited
(ASX:BGA) have firmed 0.57 after being given the green light to pursue dairy maker Warrnambool Cheese & Butter Factory Co.
(ASX:WCB) with the Australian Competition and Consumer Commission (ACCC) claiming it will not oppose the the takeover bid.
Best and worst performers
Health care has strengthened and is on top, gaining 134 points to 14,292 - Buoyed by gains in Mesoblast Limited
(ASX:MSB) having risen 12.29 per cent to trading at $6.76. Shares in Sirtex Medical Limited
(ASX:SRX) and Cochlear Limited
(ASX:COH) are also stronger.
The worst performing sector is financials, falling 54 points to 6,036 – weighed down by National Australia Bank Limited
(ASX:NAB) having dropped 2.32 per cent to $35.39. Shares in Westpac Banking Corporation
(ASX:WBC) and Perpetual Limited
(ASX:PPT) are also lower.
Gold and the dollar
Gold is trading at $US1,339 an ounce.
The Australian dollar is buying $US94.93 cents.
