Australian Stock Market Report

MIDDAY REPORT (12pm AEDT)

The Australian sharemarket is losing ground for the second straight day, with the All Ordinaries index (XAO) down 0.4 pct or 18.5 pts to 4269.2. All sectors are lower with the exception of the defensive healthcare space.

The country's largest miner, BHP Billiton (BHP) is down 0.94 pct or 35 cents to $36.82 while the smaller RIO Tinto (RIO) is 1.7 pct or $1.13 lower to $65.50.

Our big four banks are mixed with National Australia Bank (NAB) up 0.41 pct or 10 cents to $24.77 while Commonwealth Bank of Australia (CBA) is up 0.31 pct or 15 cents to $48.87. Both Westpac (WBC) and ANZ Banking Group (ANZ) are down modestly.

The next 24 hours will be crucial for global markets with the meeting of European leaders taking place overnight. The actual get together kicks off at 4.15am (AEDT) tomorrow morning so European markets will not have a chance to react to any resolution (or lack of one) overnight. This is due to the fact that European markets will be closed by then. Shares in the U.S on the other hand will be in their final three hours of trade when the meeting kicks off.

There are over 30 Australian companies holding their Annual General Meetings (AGMs) today. This is a chance for shareholders in those businesses to ask questions of management. Big names such as Insurance Australia Group (IAG), which is the owner of NRMA will be meeting today. Tabcorp Holdings and Fantastic Furniture will also be holding AGMs.

In some random news, U.S President Obama has raised US$43 million for his re-election campaign in the third quarter. For those wondering what happens to left over funds raised by Presidential candidates, Congress passed a law in the 1980s which made it illegal for members of Congress to pocket left over funds when retiring.

Interestingly however, candidates in the U.S can still use leftover cash to cover their own expenses, legal fees and pay off loans that were taken out for the compain. Funds can also be used for future elections.

On the rural front, U.S grain prices ended mostly lower however the price of corn finished flat. In production terms, corn is the world's largest cereal crop, with the U.S by far the biggest producer. America produces around 39 pct of the world's corn while Australia exports 4000 times less corn than the U.S on an annual basis.

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 losing ground, with Japan's Nikkei 225 down 1.2 pct or 104.73 pts to 8657.58 while South Korea's KOSPI index is down 1.1 pct or 20.8 pts to 1867.85.

On the economic front, Australia's consumer inflation reading has come in at a seasonally adjusted (removing some volatile items) 0.4 pct. This increases the chances that the Reserve Bank of Australia (RBA) will feel more comfortable to cut rates if it sees it fit on Tuesday next week.

The Indian, Malaysian and Singapore sharemarkets are closed today due to national holidays.

So far in trade at lunch 618 million shares have been traded worth $1.45 billion. 245 shares are up, 414 are lower and 339 are currently unchanged.

The Australian dollar (AUD) is trading at around a 1.5 month high and buys US103.6 cents, losing a bit of ground following the lower than expected inflation reading. Around 30 minutes ago the AUD was trading at US104.2 cents. Our currency certainly has not escaped the volatility we have seen in sharemarkets across the globe. Only three weeks ago the Aussie was buying US95 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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