Market Wrap: Aus shares break losing streak

Market Reports

The Data
 
The Australian share market broke a three day losing streak to close 1.2 per cent higher on the back of some encouraging economic data that fed strong performance from bluechips.
 
The S&P/ASX 200 index closed 61 points up to finish at 5,131. 
 
The value of trades was $4.4 billion on volume of 669 million shares at the close of trade. The top three stocks by value were BHP Billiton Limited (ASX:BHP), Commonwealth Bank of Australia (ASX:CBA) and Westpac Banking Corporation (ASX:WBC).
 
On the futures market the SPI is 58 points up.

Economic news
 
Business confidence in the December quarter was at its highest in more than 2½ years, according to the NAB Quarterly Business Survey. Business conditions lifted to their highest level in more than 12 months suggesting activity is starting to reflect increased confidence although still lagging below trend. Forward indicators including forward orders remain soft which is depressing labour demand. Business investment intentions outside of the mining sector rose unexpectedly, though near-term employment expectations remain soft.  
 
A stronger housing sector, largely on the back of investor activity, higher asset prices and a lower Aussie Dollar and interest rates are factors the survey identified as contributing to improved sentiment.
 
The ABS has announced that Australian retail turnover rose 0.5 per cent in December 2013, seasonally adjusted. That was slightly down on a rise of 0.7 per cent in November 2013.
 
Food retailing lead the increase with a 2.5 per cent rise and was also the strongest contributor in dollar terms. Cafes, restaurants and takeaway food services and department stores were also up. Other retailing was down 3.1 per cent in December as well as clothing, footwear and personal accessory retailing and household goods retailing. 
 
Turnover rose most in New South Wales but fell in the Northern Territory and South Australia.
 
Company news
 
AGL Energy Ltd (ASX:AGK) has had its proposed acquisition of Macquarie Generation queried by the ACCC. The competition watchdog said in a statement today that the acquisition would give AGL Energy Ltd (ASX:AGK), Origin Energy Limited (ASX:ORG) and EnergyAustralia control of 70 to 80 per cent of the generation capacity and 85% of the retail market place in New South Wales. In the ACCC’s eyes, that would ‘substantially lessen competition’ in New South Wales and other states and inhibit the entry of smaller hedge contract suppliers. AGL Energy Ltd (ASX:AGK) is reviewing the ACCC’s statement of issues with a view to making further submissions.
Shares in AGL Energy Ltd (ASX:AGK) closed 0.87 per cent down at $14.79. 
 
Reinforcing those ABS’ retail figures, Woolworths Limited (ASX:WOW) has announced a 6% increase in sales across all businesses to $31.8 billion in the first half of Fiscal 2014. 
 
CEO Grant O’Brien pointed to strong growth in its Australian food and liquor and New Zealand supermarket business over the Christmas period as major factors in the growth, as well as petrol sales, which increased by 8%. Woolworth’s online sales also showed strong growth, topping $1 billion for calendar year 2013, an increase of 40% over the previous year. 
Shares in Woolworths Limited (ASX:WOW) closed 2.36 per cent up at $34.72. 
 
Virgin Australia Holdings Ltd (ASX:VAH) has told the ASX its $49 million dollar first half loss was in line with expectations and they are not sure what has driven their share price sharpely lower as we reported last night. Virgin Australia suggested it may have something to do with confusion around the entirely separate Virgin Atlantic pulling out of Australia. In any event, the confusion cleared by the close and despite the declared loss, shares in Virgin Australia Holdings Ltd (ASX:VAH) closed 7.94 per cent up. 
 
Tabcorp Holdings Limited (ASX:TAH) also reported to the market today. The diversified entertainment giant generated a first half net profit of $74.6 million, up 2.3 per cent on the same period a year ago and declared an interim dividend of 8 cents per share. CEO David Attenborough says Tabcorp continues to grow in a competitive gambling an entertainment market. 
Shares in Tabcorp Holdings Limited (ASX:TAH) closed 0.89 per cent down. 
 
The best and worst performers

The best performing sector was Consumer Staples adding 243 points to close at 9,811. The worst performing sector was Utilities, losing 8 points to close at 5,372.
 
The best performing stock in the S&P/ASX 200 was Independence Group NL (ASX:IGO), rising 8.04 per cent to close at $3.63. Shares in Virgin Australia Holdings Ltd (ASX:VAH) and Echo Entertainment Group Ltd (ASX:EGP) also closed higher after yesterday’s losses.
 
The worst performing stock was Karoon Gas Australia Limited (ASX:KAR), dropping 4.64 per cent to close at $2.88. Shares in Qube Holdings Ltd (ASX:QUB) and Energy World Corporation Ltd. (ASX:EWC) also closed lower. 
 
Commodities

Gold is buying $US1,257 an ounce. Light crude is $0.19 up at $US97.38 a barrel. The Australian dollar is buying $US0.8959 with the RBA today saying it expects the Aussie to resume its slide despite the current rally. 
 
That’s the Market Wrap on 6 February. I’m Dallas Baird and thanks for joining me on the Finance News Network. We’ll leave you now with a look at the markets, have a great evening. 

Are you a 708 sophisticated investor?

A sophisticated investor is defined under Section 708 of the Corporations Act (net assets of $2.5 million or annual incomes in excess of $250,000).

They are eligible to receive information regarding wholesale investment opportunities that are not available to regular or retail investors.

Please subscribe if you would like to be alerted to these types of opportunities.