Australian Stock Market Report – Midday 10/3/2012

MIDDAY REPORT
(1pm AEST)

The Australian share market continued its solid run this morning. The All Ordinaries Index (XAO) opening 20 points higher, despite the weak close on overseas markets and falls in gold and oil futures.

Yesterday investors rallied behind the Reserve Bank's (RBA) decision to cut rates for the first time since June this year. The RBA cut by 25 bps or ¼% to 3.25% a 53 year low.

Last night, global share markets were held back by more Eurozone growth concerns and US investors sitting out of the market ahead of the all-important Non-farm payroll numbers out on Friday night in the states.
But as the day moved on the realised of weaker than expected economic data zapped the energy from the market. By lunchtime the All Ordinaries Index (XAO) gave back early gains and was only 8 points higher at 4,459 points.

On the economic front, new home sales fell by 5.3% in August, marking the second consecutive month of sharp falls. Sales now stand at the second lowest level in 15 years.

The Performance of Services index fell by 0.5 points to 41.9 in September. A reading below 50 suggests contracting activity. The sector has contracted for the past eight month.

And the Australian trade deficit fell more than expected,now at the biggest level since March 2008, to $2.03Billion in August following on from an upwardly revised $1,530 million deficit in July. The market was surprised by this fall due to the fact it was looking for a deficit of $700 Million.

Commodity prices were mostly weaker overnight, so many of the larger mining and energy players are flat or lower this morning. Today the S&P/ASX 200 Materials sector lost 0.5% by lunch BHP Billiton Limited (BHP) gave back 0.6% to $33.30. Rio Tinto (RIO) off 1% or $53.44 while Australia's third biggest iron ore miner, Fortescue Metals (FMG) lost over 0.85% to $3.55.

The Gold price moved higher overnight, just off 7 month highs, to US$1,774 an ounce. Our largest listed gold producers Newcrest Mining Limited (NCM) by lunch was off 1.8% to $28.78. Silver Lake Resources Limited lifted (SLR) off another 0.5% to $3.73 and Kingsgate Consolidated Limited (KCN) fell by 1.3% to $6.04. Regis Resources Limited (RRL) gave back 3.8% to $5.64.

Arrium Limited's (ARI) - the old Onesteel, share price rallied another near 1% in early trade, to $0.72, rivals in the steel space, BlueScope Steel Limited (BSL) reversed yesterday's gains off 1.7% while Sims Metal Management Limited (SGM) up 2.18% to $9.85.

The medical sector fell in the red this morning off 0.6%, CSL Limited (CSL) off 1.3% to $45.30 and with Ramsay Health Care Limited (RHC) reversed yesterday's gains off 1.19% to $24.10. Cochlear Limited was higher up over 1% to $69.49.

Energy stocks moved higher even with the US$ oil price back below US$92 a barrel. Woodside Petroleum Limited (WPL) added 0.6% and Santos Limited (STO) slightly higher, to $11.55. Oil Search Limited (OSH) added 1% to $7.59 and service provider WorleyParsons Limited (WOR) off another 0.7% to $27.46.

Media firm, APN News & Media (APN) today responded to media speculation yesterday that it was planning to close its New Zealand print business. APN shares rallied over 25% higher in late trade yesterday. After the company confirmed, this morning, that it is valuing New Zealand assets and was close to announcing its strategic review of its print assets its shares came down over 9% in early trade and by lunch was only down 2.3%. Fairfax Media Limited (FXJ) off 1.2% to $0.40 and Seven West Media Limited (SWM) up 3.04%. News Corporation (NWS) up 1% to $24.42.

Telstra Corporation Limited (TLS) up 0.5% to $3.94.
The Australian dollar (AUD) fall after yesterday's rate cut and the weaker than expected trade results the US102.23 cents and 0.79.21 euro cents.

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