Australian Stock Market Report – Midday 10/17/2011

MIDDAY REPORT (12pm AEDT)

The Australian sharemarket has kicked off the new trading week on a positive note, with the All Ordinaries index (XAO) up 1.4 pct or 59.1 pts to 4328.1. All regions of the market are improving with gains of at least 1 pct flowing through to most sectors.

The mining sector is the best performer in percentage terms at lunch, with the S&P/ASX 200 Materials index up 2.04 pct or 236.3 pts to 11811.1. The world's biggest resource company, BHP Billiton (BHP) is 2.06 pct or 76 cents higher to $37.62 while the third largest RIO Tinto (RIO) is up 2.5 pct or $1.70 to $70.00.

WPL shares are up 1.03 pct or 36 cents to $35.39. Australia's second largest oil and gas producer Woodside Petroleum (WPL) will issue its production update for the third quarter on Friday.

The big banks are all improving, with the S&P/ASX 200 Financials index up 1.6 pct or 63.8 pts to 4054.8. ANZ Banking Group (ANZ) is up 1.76 pct or 37 cents to $21.37, National Australia Bank (NAB) is 1.57 pct or 38 cents higher to $24.66, Westpac (WBC) is 1.53 pct or 33 cents stronger to $21.95 while Commonwealth Bank of Australia (CBA) is 1.47 pct or 71 cents to $48.21.

Finance ministers from the world's 20 largest economies met on the weekend to prepare for an official meeting on November 3 in Cannes, France. A solution for debt troubled Greece and assistance for the European banks are expected to be the main talking points.

It will be a relatively quiet week on the economic front, with the latest reports on new cars in September out today in addition to the state of lending to both businesses and consumers.

The U.S earnings season continues with IT giants International Business Machines (IBM;us) and Apple (AAPL;us) both posting their profit results over the coming days. Shares in Apple have significantly outperformed the broader market this year, rising by 30 pct since the start of January while the Dow Jones Industrial index is up only 0.5 pct this year.

Last week, aluminium producer Alcoa (AA;us) unofficially kicked off the third quarter earnings season by falling short of profit expectations. One of the outperformers was Google (GOOG;us) which made more than US$2.7 billion in the quarter (July to September).

Tomorrow will be one of the biggest days of the month for China due to a barrage of economic figures scheduled for release. The world's second largest economy will announce its latest Gross Domestic Product (GDP) reading which is expected to have moderated to around 9.5 pct. The latest report on the retail sector will also be issued.

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 be 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.

Asian markets are mixed at lunch, with Japan's Nikkei 225 index up 1.55 pct or 135.65 pts to 8883.61, while South Korea's KOSPI index is up 0.99 pct or 18.09 pts to 1853.49.

So far in trade at lunch activity is remaining a little light. 789 million shares have been traded worth $1.19 billion. 615 shares are up, 202 are lower and 299 are currently unchanged.

The Australian dollar (AUD) is remaining above parity levels against the greenback for the third straight session and buys US103.2 cents. The AUD has risen by around US7 cents so far in October.

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

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