MIDDAY REPORT

(12pm AEDT)

The Australian sharemarket is down 1.6 pct or 71.5 pts to 4266.4, effectively wiping out all of yesterday's impressive gains. Markets tumbled overnight due to concerns that the European debt solution might fall short of expectations.

Commodity prices were mostly lower overnight and our miners are amongst the day's biggest losers. The world's third largest miner, RIO Tinto (RIO) is down 4.07 pct or $2.85 to $67.10 while the larger BHP Billiton (BHP) is down 2.79 pct or $1.06 to $36.59.

BHP started off the start of the month in promising fashion, after sitting around $34 a share. However over the past few weeks BHP shares have been trading in a range between around $36.60 and $37.80. The world's largest miner has not been able to crack through the $38.00 mark so far this month.

The four big banks are all down by at least 0.8 pct. Commonwealth Bank of Australia (CBA) is down 1.7 pct or 82 cents to $47.47, Westpac (WBC) is 1 pct or 22 cents lower to $21.77, National Australia Bank (NAB) is 1.66 pct or 41 cents weaker to $24.34 while ANZ Banking Group (ANZ) is easing by 0.84 pct or 18 cents to $21.18.

Australia's largest telco, Telstra (TLS) is holding its Annual General Meeting (AGM) today. Shareholders are voting on the $11 billion handover of its fixed lines to the Federal Government. The company has said it plans on maintaining its 28 cent a share dividend in 2012 and 2013. TLS has been paying at least 28 cents a year to shareholders since 2005. TLS is one of the better performers today and is up 1.61 pct or 5 cents to $3.16.

Apple's newest product, the iPhone4S has reportedly already sold four million handsets in its first three days on the market. Shares in Apple (AAPL;us) dropped overnight but are still up close to 30 pct so far this year in U.S trade.

Grain markets finished flat, with the price of wheat losing a little ground. Iraq purchased 350,000 tonnes of wheat overnight, almost half of which originated from Australia.

Today is one of the most important days of the week for economic news in the region. The Reserve Bank of Australia (RBA) will release the minutes from its October interest rate meeting. This should provide further insight into the central bank's stance on rates. It was made quite clear earlier in the month that rate cuts were definitely likely if the situation worsened in the Eurozone.

Ahead of the meeting of leaders at the European Summit this week, Germany's finance minister said it was unrealistic to expect a definitive solution to the euro zone debt crisis this weekend. This comes only a few days after French and German leaders announced plans to issue a comprehensive plan by the summit.

The earnings season is not proving to be much of a distraction for markets, with the majority of the focus being dominated by developments out of Europe. According to a Reuters report, 45 of the 500 companies making up the S&P500 index have already posted profit results. More than 60 pct of the results have beaten analyst expectations.

Discount broker Charles Schwab (SCHW;us) posted a rise in its third quarter profit to US$220 million, which fell slightly short of market forecasts. It certainly has not been a great three months for the broker as its shares have slumped by more than 30 pct.

Wells Fargo (WFC;us), one of the world's largest banks fell short of profit expectations in the third quarter (July to September). Part of the reason is that despite an improvement in lending growth, Americans are still saving at a faster pace which is taking the edge of profits. WFC dropped 8.4 pct overnight taking the falls for the year to around 20 pct.

International Business Machines Corp (IBM;us) posted its profit results after market close this morning, which came in broadly in line with profit expectations at US$3.84 billion for the three months to September. Revenue also rose slightly. IBM shares fell around 2 pct; however the stock has improved by 27 pct so far in calendar year 2011.

Tonight, Domino's and Apple will both post their profit results.

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 mostly lower, with South Korea's KOSPI index down 1.96 pct or 36.62 pts to 1828.56 and Japan's Nikkei 225 index down 1.39 or 123.61 pts to 8755.99.

So far in trade at lunch 818 million shares have been traded worth $1.5 billion. 181 shares are up, 600 are lower and 293 are currently unchanged.

The Australian dollar (AUD) is remaining above parity levels against the greenback for the fourth straight session, however has pulled back with the equities market to buy US102 cents.

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.