Stocks flat in weak trade

THE sharemarket closed largely unchanged yesterday after a day of tepid trading as investors geared up for the start of the US earnings season.

By InvestSMART · 10 Jan 2012

By InvestSMART ·
10 Jan 2012

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THE sharemarket closed largely unchanged yesterday after a day of tepid trading as investors geared up for the start of the US earnings season.

The market pared early gains after data showed Australian retail trade was a seasonally adjusted $20.93 billion in November, largely unchanged from the previous month and below market forecasts of a 0.4 per cent rise.

Consumer discretionary stocks lost ground, followed by sectors such as energy and industrial stocks. City Index chief market analyst Peter Esho said some high street retailers might see "more revisions needed on the downside" in the near term.

But he said well-placed retailers could outperform in the coming earnings season. He picks Centro Retail Australia, Harvey Norman, Myer and Ten Network Holdings as his preferred bets.

Super Retail Group ended the day 2.2 per cent higher at $5.58 after the sports retailer bucked the trend to report a 35 per cent rise in sales in the last 26 weeks of 2011. At the close, the S&P/ASX 200 Index was down 3.1 points at 4105.4.

Dealers also remained wary of putting money on the table before the start of the US earnings season.

Aluminium maker Alumina was in focus because of its joint venture with US-based Alcoa. Shares in the miner and refiner fell 1.4 per cent to $1.095.

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Frequently Asked Questions about this Article…

Why did the Australian sharemarket close largely unchanged in the recent trading session?

The market finished largely flat after a day of tepid trading as investors waited for the start of the US earnings season. Early gains were pared after Australian retail trade data came in weaker than expected, which reduced buying momentum.

How did the November Australian retail trade data affect investor sentiment?

November retail trade was reported at a seasonally adjusted $20.93 billion, largely unchanged from October and below forecasts of a 0.4% rise. That disappointing print helped trim early market gains and weighed on consumer-focused stocks.

Which sectors lost ground during the session and why should everyday investors care?

Consumer discretionary stocks led declines, followed by energy and industrial sectors. For everyday investors, this highlights how softer retail data and cautious market sentiment ahead of earnings can disproportionately affect consumer and cyclical names.

Which retailers did analysts highlight as potential outperformers in the upcoming earnings season?

City Index chief market analyst Peter Esho said well-placed retailers could outperform and specifically preferred Centro Retail Australia, Harvey Norman, Myer and Ten Network Holdings as his top picks to watch in the coming earnings season.

What did the article report about Super Retail Group’s sales and share movement?

Super Retail Group bucked the broader trend by reporting a 35% rise in sales over the last 26 weeks of 2011. Its shares finished the day 2.2% higher at $5.58.

Why were dealers described as wary before the US earnings season?

Dealers were cautious about deploying capital ahead of the US earnings season, preferring to wait for corporate results that could set broader market direction—this reduced trading activity and contributed to a subdued market.

What happened to Alumina shares and how is the Alcoa joint venture linked?

Alumina was in focus because of its joint venture with US-based Alcoa, and shares in the miner and refiner fell 1.4% to $1.095 during the session. The JV with Alcoa was cited as a point of investor attention.

How did the S&P/ASX 200 index perform in that session?

The S&P/ASX 200 Index was slightly lower, down 3.1 points to 4105.4, reflecting the overall subdued trading and cautious investor posture ahead of major US earnings reports.