Australian Stock Market Report – Afternoon 7/19/2012

AFTERNOON REPORT
(4.30pm AEST)

The Australian share market moved back into the black today, following strong production reports from energy players and a positive offshore lead. Strong earnings results from a number of US companies, including chipmaker Intel, saw the Dow Jones Index rose almost 1pct. Locally the All Ordinaries Index (XAO) rallied to close higher by 80pts or 1.9pct to 4236.4.

Shares in energy giant Woodside Petroleum (WPL) today rose an impressive 7.5pct to $32.67 after the company released June quarter production numbers and increased its guidance. WPL produced 20.1 million barrels of oil in the three months to June, up from 14.1 in the first quarter - a rise of 43pct. Compared to the previous corresponding period, production was up 23pct. A better than expected performance from WPL's Pluto LNG project in Karratha, WA should help contribute to the expected rise in next quarter production. Elsewhere Santos (STO) reported a 9pct rise in production on the quarter, with revenue up 18pct. STO shares rose 5.8pct to $10.69 today. The energy sector as a whole was up 4.9pct, the best performing on the market.

Mining stocks came back after a steep sell-off in the previous two sessions. BHP Billiton (BHP), which came out with a solid 2Q production report yesterday, rose 3.1pct to $31.10 while Rio Tinto (RIO) was up 1.1pct to $53.36. Shares in iron ore miner Fortescue Metals Group (FMG) were up 4.8pct to $4.59.

Financial stocks also received a boost. Shares in the Commonwealth Bank (CBA) rose to their highest level since May 2010, up a further 1.2pct to $55.90. The National Australia Bank (NAB) was up 1.3pct to $24.08 while the ANZ (ANZ) rose 1.2pct to $23.23 and Westpac (WBC) gained 1.6pct to $22.95.

In the media space today, Fairfax (FXJ) Chairman Roger Corbett announced Hungry Jack's founder Jack Cowin has been appointed to the company's board. Mr Cowin, a close friend and adviser to FXJ's largest shareholder Gina Rinehart, has agreed to the company's charter of editorial independence. The body representing journalists at Fairfax has welcomed the appointment of Mr Cowin, who's been described by many as a good businessman. Gina Rinehart's company, Mrs Georgina Hope Rinehart & Hancock Prospecting Pty Ltd, has an 18.7pct stake in FXJ. FXJ shares today closed steady at $0.565.

Etihad Airways today received the all clear to double its stake in Virgin Australia (VAH) to 10pct. The Middle East carrier acquired a 4.99pct equity stake in Virgin Australia earlier this year. VAH today gained 2.6pct to $0.39 while Qantas (QAN) was up 1pct to $1.06.

Shares in women's wear retailer Noni B (NBL) rose 6.1pct today to $0.70 after the company announced it expects a significant lift in full year profit. Noni B is tipping profit will come in between $2.5 to $2.7 million when it announces results for the 2012 financial year in August. The result will be a major improvement on the $200,000 net profit it reported for 2011.

Meanwhile, retailers have welcomed news the Federal Government will begin to fund an official gauge of internet spending. The Australian Bureau of Statistics (ABC) will receive $2.1 million over the next four years for the research. Shares in traditional retailers David Jones (DJS) and Myer Limited (MYR) both rose today, with DJS up 1.8pct to $2.32 while MYR was up 2.1pct to $1.735.

The Australian dollar continues to be kind to travellers and at 4.30pm AEST was at an eleven week high against the greenback, worth US103.91c. It was also buying £0.6635 and €84.55c.

On the market overall, a total of 1.5 billion shares were traded, worth $4.6 billion. 529 were up, 349 were down and 341 were unchanged.

At 4.30pm AEST on the futures market, the SFE 200 Futures was at 4160, up 68pts or 1.7pct.

Ahead tonight, data on existing home sales is released in the US together with the leading index, Philadelphia Fed survey and weekly jobless claims.

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