Australian Stock Market Report – Midday 10/29/2012

MIDDAY REPORT
(12pm AEDT)

The Australian sharemarket is kicking off the week in positive fashion, with the All Ordinaries Index (XAO) edging higher by 0.4 per cent or 16 pts to 4512.3 at lunch. Most sectors are improving, with the exception of the defensive healthcare and telco sectors.

The S&P/ASX 200 Materials Index is up 0.65 per cent or 64.9 pts to 10125.6. Australia's second largest mining company, Rio Tinto (RIO) is 1.33 per cent or 75 cents higher to $57.20 while the larger BHP Billiton (BHP) is 0.27 per cent or 9 cents stronger to $33.95.

The major banks are managing to remain in the black, however have been flirting with negative territory for much of the morning. The big four are still certainly not guaranteed to finish the day stronger. Westpac (WBC) is up 0.67 per cent or 17 cents to $25.36. ANZ Banking Group (ANZ) is 0.12 per cent or 3 cents higher to $25.26, National Australia Bank (NAB) is 0.08 per cent or 2 cents better to $25.92 while Commonwealth Bank of Australia (CBA) is 0.07 per cent or 3 cents higher to $56.89. Mid-week, NAB is expected to issue its profit numbers to the market.

Diversified agri-business, Elders (ELD) has not been enjoying gains this morning however; with its shares slipping by 5.88 per cent or 1.5 cents to 24 cents. ELD announced its plans to sell its main rural services business to return value to investors. Unfortunately, for shareholders though the announcement has done little for a company that has dropped in value for five straight years on the Australian sharemarket.

On the economic front, no major data is scheduled for release today however a number of reports will be issued over the coming days. Business inflation and building approvals will be two of the highlights. Building approval numbers give us an idea how many properties are being planned to be built a little further down the track.

In the region, two major readings on the health of China's manufacturing sector will be issued this Thursday. This always gets investors' blood boiling with anticipation. China is our largest and most important trading partner by a significant margin.

In Europe, manufacturing, employment and inflation reports will be out this week while European Central Bank (ECB) President Mario Draghi will be delivering a talk tomorrow night.

In the U.S, the main area of focus will be the monthly jobs report, which is scheduled for release this Friday. Around 120,000 jobs are expected to have been created last month, while the unemployment rate is likely to edge higher from 7.8 per cent to 7.9 per cent.

U.S futures are currently pointing to a slightly lower start to trade tonight. The U.S market trades between 11.30pm (AEST) and 7am (AEST).

So far in trade at lunch, 908 million shares have been traded worth $1.09 billion. 360 shares are up, 420 are lower and 316 are currently unchanged.

The Australian dollar (AUD) is weaker and buys US103.5 cents, €80.1 cents and £64.3 pence.

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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