MIDDAY REPORT
(12pm AEDT)

The Australian sharemarket is surprisingly holding up very well despite a fall in U.S shares on Friday. The All Ordinaries index (XAO) is up 1.1 pct or 46.4 pts to 4271.4, adding to the 3.8 pct gains recorded last week.

Almost all sectors are improving, with the uranium miners the standouts. Extract Resources (EXT) is up 10.2 pct or 82 cents to $8.86 off the back of takeover speculation for the miner while other large uranium producers, such as Paladin Energy (PDN) is 12.9 pct or 20 cents higher to $1.75.

BHP Billiton (BHP), Australia's biggest miner and the largest company (by far) listed on the local sharemarket is up 0.86 pct or 32 cents to $37.52 while the smaller RIO Tinto (RIO) is 1.97 pct or $1.31 higher to $67.73. The gains from our two leading miners (in terms of size) come despite a mixed night of trade on Friday in the U.S.

Australia's largest banks are also all trading higher, with Westpac (WBC) up 1.98 pct or 42 cents to $21.66, ANZ Banking Group (ANZ) is 1.69 pct or 35 cents higher to $21.08, National Australia Bank (NAB) is 1.6 pct or 38 cents stronger to $24.13 while Commonwealth Bank of Australia (CBA) is up 0.97 pct or 45 cents to $46.70.

The airlines are holding up well, with Virgin Australia (VBA) shares up 1.59 pct or 0.5 cent to 32 cents while the largest Qantas (QAN) is 1.67 pct or 2.5 cents higher to $1.52. The gains are flowing through despite the fact that around 11,000 QAN passengers are expected to be affected by a number of strikes taking place by workers across the country. QAN shares have fallen around 40 pct this year.

It was a busy weekend for European markets, with Fitch becoming the third major ratings agency to cut Italy's credit rating. Spain was also downgraded. Moody's (another major agency) downgraded 12 British banks partly due to the removal of government financial support in the sector.

Both the German and French leaders are dragging their feet when it comes to announcing tangible solutions to the Eurozone debt crisis. Chancellor Merkel and President Sarkozy said that more information will be released by month's end in the form of a complete package to stabilize the Eurozone.

The Europeans might do well to listen to the words of Napoleon Bonaparte who said that it is important to "...take time to deliberate, but when the time for action arrives, stop thinking and go in".

The third quarter reporting season kicks off U.S tomorrow night unofficially. As usual, the world's third largest aluminium producer Alcoa (AA;us) will kick the season off with its earnings results.

On the economic front, a report released by ANZ has shown that there was a 2.1 pct drop in the number of jobs being advertised in both newspapers and online last month. In the report it was stated that "Moderating job advertising points towards a further softening in employment growth in the months ahead and a modest rise in the unemployment rate. To date, the weakening trend for job advertising is more like the 1995-96 experience rather than the sharp slowdown during the global financial crisis in 2008-09 or even the more significant slowdown experienced in 2000-01. During 1995-96 the unemployment rate rose 0.4% between June 1995 and December 1996, while in
2000-01, unemployment rose around 1 percentage point."

Following the start of daylight savings at the start of October, major Asian markets will be trading between the hours mentioned below until April next year (note that over the next month, some of the times might slightly off due to several countries in the region changing their clocks at differing periods).

The Hong Kong sharemarket trades in two sessions each day and will now open for trade between 1pm (AEDT) and 3.30pm (AEDT) while the second session is between 5.30pm (AEDT) and 7pm (AEDT).

Out of Japan, the first session will be between 11am (AEDT) and 1pm (AEDT) while the second session is between 2.30pm (AEDT) and 5pm (AEDT).

The Singapore exchange will be open for trade between 12pm (AEDT) and 3.30pm (AEDT) for the first session and then between 5pm (AEDT) and 8pm (AEDT) for the second.

South Korea's KOSPI index is up 0.96 pct or 16.83 pts to 1776.6, while the Japanese sharemarkets are closed today due to the Health and Sports Day public holiday. The two major exchanges in Japan are the Tokyo Stock Exchange and the Osaka Exchange. China's Shanghai Composite index is trading for the first time in 6 business days and is largely flat.

So far in trade at lunch, 705 million shares have been traded worth $1.79 billion. 554 shares are up, 287 are lower and 263 are currently unchanged.

The Australian dollar (AUD) is trading around 2.5 cents higher against the greenback compared to levels hit at the start of last week. The Aussie currently buys US98.3 cents.

The AUD is the world's fifth most traded currency behind the U.S dollar, Euro, Japanese Yen and British Pound. The AUD accounts for around 7 pct of all foreign exchange trades.