Australian Stock Market Report – Midday 10/24/13

MID-SESSION REPORT
(12.30pm AEDT)

The Australian sharemarket is trading around a five-year high, with the All Ordinaries Index (XAO) up by 0.3 per cent. This is quite a positive outcome considering that global markets lost ground overnight as short-term Chinese interest rates rose. This following the Chinese central bank's (PBoC) decision to remove some excess liquidity from financial markets.

Economists are most looking forward to the HSBC Flash Manufacturing PMI reading out at 12.45pm (AEDT) today. This provides an early look into the health of China's manufacturing sector. Around 430 businesses are interviewed, and this has the potential to move not only equity markets but also currencies (in particular if it surprises significantly). The market is expecting a reading around 50.5. Any number above 50.0 indicates manufacturing industry expansion.

Commonwealth Bank (CBA), Australia's largest listed company is up by 0.84 per cent and has cracked through a fresh all-time high today ($75.28).

Plenty of Annual General Meetings today, with BHP Billiton (BHP), Newcrest Mining (NCM), Toll Holdings, Suncorp, Amcor and Pacific Brands some of the bigger names to meet with shareholders.

Earlier this week, BHP delivered a 23 per cent rise in iron ore production over the previous quarter, while petroleum production rose by 2 per cent. With the US political concerns out of the way (for now), combined with relatively solid Chinese economic data, the miners have shot higher in the past week. BHP is down by 0.3 per cent at lunch but has improved by close to 5 per cent so far this week.

Gold producer Newcrest Mining (NCM), which continues to have issues with its margins and high levels of debt is also holding its AGM. NCM is down 0.9 per cent today and 50 per cent this calendar year.

Pacific Brands (PBG) is down by 3.36 per cent (down more than 6 per cent earlier) after delivering a profit warning to the market earlier. PBG engages in manufacturing, wholesaling and the retailing of products such as socks, underwear, uniforms and sporting goods.

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