MIDDAY REPORT (12pm AEST)

The Australian sharemarket has wiped out yesterday's gains, with concerns that the European leaders remain divided on a potential debt crisis solution. Investors are extremely sensitive to both positive and negative news out of the Eurozone. The Americans have been quick to judge and criticize the Euro leaders, with President Barack Obama saying that governments have been too slow to agree on a resolution.

This is perhaps slightly ironic considering the Americans are experiencing their own economic problems and helped drive a number of economies into recession just a few years ago. It is important to remember that the Eurozone is made up of 17 nations sharing the common currency, with a number of varying political views complicating the situation further.

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Commodity prices fell heavily overnight, with the price of crude oil slumping by 3.8 pct, gold slumped 2.1 pct and base metal prices lost as much as 5.7 pct. Australia's largest miner, BHP Billiton (BHP) is down 2.51 pct or 89 cents to $34.62 while the smaller RIO Tinto (RIO) is 3.54 pct or $2.29 weaker to $61.76.

The major Australian banks are losing ground, with National Australia Bank (NAB) down 2.44 pct or 56 cents to $22.39, Commonwealth Bank of Australia (CBA) 1.49 pct or 68 cents lower to $44.82, ANZ Banking Group (ANZ) 1.06 pct or 21 cents weaker to $19.53 and Westpac (WBC) down 0.87 pct or 17 cents to $20.48.

The ACCC, the consumer watchdog has given the go ahead to a deal between Qantas (QAN) and American Airlines today. Part of the deal involves both airlines cooperating on services between Australia and New Zealand. QAN is down 2.41 pct or 3.5 cents to $1.41. Its competitor, Virgin Australia (VBA) is 1.59 pct or 0.5 cent lower to 31 cents.

Following the end of daylight savings in April this year, major Asian markets will be trading between the hours mentioned below until mid October.

The Hong Kong sharemarket trades in two sessions each day and will now be opening for trade between 11.30am (AEST) and 2pm (AEST) and then between 3.30pm (AEST) and 6pm (AEST) in its second session.

Out of Japan, the first session will be between 10am (AEST) and 12pm (AEST), while the second session is between 1.30pm (AEST) and 4pm (AEST).

The Singapore exchange will be open for trade between 11am (AEST) and 2.30pm (AEST) for the first session and then between 4pm (AEST) and 7pm (AEST) in its second session.

The major Asian markets are mostly lower at lunch, with Japan's Nikkei 225 index down 0.89 pct or 76.53 pts to 8539.12, South Korea's KOSPI index is slightly higher and China's Shanghai Composite index is 0.48 pct 11.40 pts lower to 2380.65.

On the economic front today, the latest quarterly population report will be released (for the three months to March). The Australian population is growing at its slowest pace in 5 years, which contributes to the weakness we are seeing in both retail and housing sectors. BHP has estimated that the Australian mining sector will need around 170,000 additional workers over the next five years. In the three months to December 2010, Australia's population grew by 69,703 to 22,477,378. Annual population growth has slowed from 1.57 pct to 1.47 pct.

Migration to Australia helps deal with the skilled labour shortage, gives the retail sector a boost and increases demand for housing.

The latest monthly report on job vacancies will also be out today. Employers are expected to remain reluctant to hire. This report is released on a quarterly basis by the Australian Bureau of Statistics (ABS) and a reading is calculated by conducting a survey of close to 5000 employers around Australia.

So far today, 677 million shares have been traded worth $1.73 billion. 202 shares are up, 603 are lower and 251 are currently unchanged.

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One of the better performing stocks today (in percentage terms) is Alumina (AWC), which is up 3.17 pct or 4.5 cents to $1.46.

The Australian dollar (AUD) has continued to remain volatile and has weakened over the past 24 hours to currently buy US97.5 cents.