Australian Stock Market Report – Midday 10/9/13

MID-SESSION REPORT
(12.30pm AEST)

The Australian sharemarket is down for the fourth straight day, with the All Ordinaries Index (XAO) down 0.1 per cent. The US government shutdown has entered day eight and we're only nine days away from the debt ceiling deadline (US will run out of cash to keep economy running unless ceiling raised).

Commodity prices were mixed overnight, with oil up 0.4 per cent while gold eased modestly. One of the biggest losers recently has been Newcrest Mining (NCM) which is down by around 50 per cent since the start of this calendar year. NCM is currently down 0.5 per cent following management change announcements. Don Mercer, its current Chairman will be retiring while Chief Executive, Greg Robinson is expected to be replaced in the second half of next year.

BHP Billiton (BHP) is flat while the smaller more iron ore focused; Rio Tinto (RIO) is down 0.63 per cent.

The major banks are mixed, which is helping minimise losses, with Westpac (WBC) up by around 0.9 per cent while Commonwealth Bank (CBA) is up by a few cents.

The defensive telcos are improving, with Telstra (TLS) up 0.5 per cent while Optus has struck a deal worth $60m to provide telco services to Virgin Australia.

On the economic front, consumer confidence has eased from a close to three-year high according to a monthly survey of consumers. The shutdown seems to be having an impact on confidence locally, overriding the benefits from the clear federal election outcome, which pushed confidence 4.7 per cent higher last month.

Last night, the International Monetary Fund (one of the leading forecasters of growth) revised down its global growth estimates to 2.9 per cent (from 3.2 per cent) for the year. The market is looking forward to the FOMC minutes which will be issued later on this evening and should give us a better idea why the Fed did not announce the start of its tapering process in September.

At lunch, 646 million shares have changed hands, worth $1.54 billion. 274 stocks are higher, 487 are in the red while 296 are unchanged.

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