Australian Stock Market Report – Midday 10/4/2012

MIDDAY REPORT
(1pm AEST)

The Australian share market started of strong up near 10 points but as the morning went on the market lost ground. By lunchtime the All Ordinaries Index (XAO) moved into the red and was off 1pt to 4,460 points, hit by the slide in the oil price overnight and weak economic data.

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.

Retail sales only up 0.2% in August listing a strong recovery in department store sales and food retailing also increasing, but overall showing a continuation in soft retail trading.

Building approvals for the month of August up 6.4% but the prior month was revised lower.
Commodity prices were weaker overnight, and today we have seen the larger mining and energy players losing ground. Today the S&P/ASX 200 Materials sector lost 0.9% by lunch time. BHP Billiton Limited (BHP) gave back 1.4% to $32.97. Rio Tinto (RIO) off 0.5% or $53.45 while Australia's third biggest iron ore miner, Fortescue Metals (FMG) lost over 0.85% to $3.50. Arrium Limited's (ARI) - the old Onesteel, continued to move higher 2.80% in early trade, rivals in the steel space, BlueScope Steel Limited (BSL) rebounded up 5.17%.

The Gold price lifted to US$1,782 an ounce. Our largest listed gold producers Newcrest Mining Limited (NCM) by lunch was off 2.3% to $28.16 and Kingsgate Consolidated Limited (KCN) fell by 3.8% to $5.77. Regis Resources Limited (RRL) gave back 1.9% to $5.56.

But the big news story overnight and again today was the fall in the US$ oil price. S&P/ASX 200 Energy sector lost 0.59% after US$ oil price back below US$88 a barrel at the close in the US session. Woodside Petroleum Limited (WPL) off 0.9% and Santos Limited (STO) lower, off 0.95% to $11.42. Oil Search Limited (OSH) off near 1% to $7.50 and service provider WorleyParsons Limited (WOR) off another 0.66% to $27.30. One stock that did move higher was Whitehaven Coal Limited (WHC) up 5.4% to $2.95.
The medical sector fell in the red this morning off 0.2%, sector heavy weight CSL Limited (CSL) was higher up 0.5% to $45.37 but Ramsay Health Care Limited (RHC) gave back more ground off 0.3% to $24.06 and bionic ear maker Cochlear Limited was off 1.18% to $68.43.

The retail sector was in focus after the retail numbers showed a large disparity between what sub sectors were doing well and what was not. The strong lift in department store sales was still not enough to reignite the full sector, Myer Holdings Limited (MYR) was up 0.98% to $1.75 while David Jones Limited (DJS) off 1.6% to $2.47. Food retailing, for August, increased in line with expectations up 0.4%, Woolworths Limited (WOW) added and its rival Wesfarmers Limited (WES) up 0.29% and Coca-Cola Amatil Limited (CCL) added 1%.

Yesterday, Media firm, APN News & Media (APN) said that it was still valuing New Zealand assets and was close to announcing its strategic review of its print assets. But we still have not firm confirmation of APN management's plans today. APN shares continued to reclaim some of Mondays falls up another 1.2% to $0.42. Fairfax Media Limited (FXJ) lifted by 0.6% to $0.40.25cents and Seven West Media Limited (SWM) up 3.04%. News Corporation (NWS) added another 1.72% to $24.82.

Telstra Corporation Limited (TLS) a tad lower, off 0.13% to $3.93. Qantas Airways (QAN) off 0.6%
The Australian dollar (AUD) fall after the weaker than expected retail sales report now the US101.89 cents before rebounding an now holding at 102.13 and 0.79 euro cents.

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