Australian Stock Market Report

MIDDAY REPORT (12pm AEDT)

The Australian sharemarket has kicked off the new trading week in positive fashion, with the All Ordinaries index (XAO) up 1.9 pct or 78.8 pts to 4282.2. All sectors are currently improving with the mining and energy sectors the best improvers in percentage terms.

The world's largest miner, BHP Billiton (BHP) is up 2.16 pct or 77 cents to $36.47 while RIO Tinto (RIO) is up 3.72 pct or $2.34 to $64.91. Woodside Petroleum (WPL) is up 2.61 pct or 87 cents to $34.25 and Santos (STO) is 2.06 pct or 25 cents higher to $12.37.

The financials are performing well, with the S&P/ASX 200 Financials index up 2 pct or 79.9 pts to 4067.4. Westpac (WBC) is up 2.09 pct or 45 cents to $21.96, Commonwealth Bank of Australia (CBA) is 1.87 pct or 89 cents higher to $48.44, ANZ Banking Group (ANZ) is 1.79 pct or 38 cents stronger to $21.59 while National Australia Bank (NAB) is up 1.8 pct.

The latest business inflation reading was released for the previous quarter (July to September) this morning. The latest number was in line with expectations as prices rose 0.6 pct across Australian businesses. This is a forward looking indicator because if prices in businesses are increasing, chances are part of the cost will be eventually passed on to the consumer.

There are around 10 companies meeting for their Annual General Meetings (AGM) today, including Origin Energy, Wotif.com Holdings and Bendigo and Adelaide Bank.

Japan will release its latest trade balance report today. We will find out if Japanese exports are continuing to improve following the March 11 earthquake in Japan.

The New Zealand sharemarket is conveniently closed today for Labour Day. This is the day after their Rugby World Cup triumph last night. Thailand's sharemarket is also closed today for a national public holiday.

The three main things to keep an eye on this week will be the European Union's second summit this Wednesday, the latest Consumer Price index (CPI) which measures the changes in prices paid for goods and services across the country and the latest Gross Domestic Product (GDP) for American economy on Thursday night. If inflation (CPI) remains subdued this Wednesday, it would increase the likelihood of a rate cut from our central bank if it deems it necessary over the next few months.

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 stronger, with South Korea's KOPSI index up 1.33 pct or 24.44 pts to 1862.82, while Japan's Nikkei 225 index is up 1.5 pct or 130.27 pts to 8809.16.

So far in trade at lunch 725 million shares have been traded worth $1.46 billion. 582 shares are up, 248 are lower and 296 are currently unchanged.

The Australian dollar (AUD) is remaining above parity levels against the greenback for the seventh straight session and buys US103.4 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.

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