Market Wrap: Aus shares trim weekly loss

Market Reports

The Australian share market advanced 0.5 per cent today but lost ground over the first week of June. The week was marked by the Reserve Bank of Australia's (RBA) decision to again keep rates at a record low, the falling price of iron ore and lingering Federal Budget worries.   
 
Most sectors rose today led by the gold and tech sub indexes while energy and the dominant banking sector supported broader gains and the major miners remained weak. Traders were today encouraged by the European Central Bank’s (ECB) package of monetary stimulus measures announced overnight. 
 
In the week ahead the local bourse will pause for the Queen’s Birthday Public Holiday on Monday (in all states except for Western Australia). When trading resumes on Tuesday Australia will respond to the US monthly employment report due for release this evening and expected to show a gain of 220,000 jobs.  
 
Figures
 
The S&P/ASX 200 index advanced 27 points today, trimming the weekly loss of 28.5 points to finish at 5,464. 
 
The value of trades was $4.23 billion on volume of 708 million shares at the close of trade. 
 
The top three stocks by value were BHP Billiton Limited (ASX:BHP), Telstra Corporation Limited (ASX:TLS), and ANZ Banking Group (ASX:ANZ)
 
On the futures market the SPI is 20 points stronger. 
 
Wall Street
 
US major indexes have gained over the four trading days this week: The Dow Jones Industrial Average has gained 137 points. The S&P 500 Index has gained 20 points. The NASDAQ has gained 48 points. The 100 Index has gained 41 points. 
 
Economic news
 
The Australian construction sector improved last month but still stayed in contraction territory due to weakness in engineering and commercial construction. The Australian Industry Group (AiG) and Housing Industry Association’s (HIA) Performance of Construction Index (PCI) rose 0.8 points to 46.7 in May, remaining below 50 which indicates contraction. 
 
Company news
 
ANZ Banking Group’s (ASX:ANZ) proposed sale of ANZ Trustees Limited to Equity Trustees Limited (ASX:EQT) has come one step closer to completion after receiving Ministerial approval. The bank inked a $150 million deal to divest the business in April and now says the sale is expected to be completed by early July. Under the original agreement Equity Trustees and ANZ have also entered into an exclusive long term referral relationship. Shares in ANZ closed the week 1.32 per cent stronger at $33.67.
 
Insurance Australia Group Limited’s (ASX:IAG) proposed acquisition of Lumley General Insurance has scored the green light from the Reserve Bank of New Zealand. The business forms the New Zealand part of Wesfarmers Limited (ASX:WES) insurance underwriting business. IAG has now cleared all the New Zealand regulatory hurdles and pending approvals in Australian hopes to tie up the deal by the end of this month. Shares in IAG closed the week 0.34 per cent higher at $5.87. 
 
Shares in Adelaide Brighton Limited (ASX:ABC) closed just over 2 per cent stronger after announcing the reinstatement of lime supply to a major customer in the Northern Territory. The cement manufacturer’s took a hit in May when warnings its annual lime sales volumes are likely to fall 5 per cent partially due to the major customer’s suspension of operations. 
 
Shares in Sundance Resources Limited (ASX:SDL) sank 13 per cent after appointing Mota-Engil Africa to build the $US3.5 billion port and rail infrastructure for the Mbalam-Nabeba Project. The West African focussed iron ore developer has also appointed Africa’s biggest bank, Standard Bank, to advise on funding and be the lead debt arranger.
 
Best and worst performers
 
The best performing sector was energy, lifting 156 points to close at 14,493.
The worst performing sector was telco services, losing 24 points to close at 1,823 points.
 
The best performing stock in the S&P/ASX 200 was Evolution (ASX:EVN), rising 7.43 per cent to close at $0.80. Shares in FlexiGroup Limited (ASX:FXL) and Beadell Resources Limited (ASX:BDR) also closed higher.
 
The worst performing stock was Lynas Corporation Limited (ASX:LYC), dropping 6.45 per cent to close at $0.14. Shares in Acrux Limited (ASX:ACR) and Atlas Iron Limited (ASX:AGO) also closed lower. 
 
Commodities 
 
The price of gold is buying $US1,255 an ounce, down $2.21 over the week. 
Light crude is $0.16 lower at $US102.48 a barrel. 
 
The Australian dollar
 
The Australian dollar is buying $0.9333, up slightly over the week.