Australian Stock Market Report – Midday 1/10/14

MID-SESSION REPORT
(12pm AEDT)

The Australian sharemarket is slipping for the fourth time this week, with the All Ordinaries Index down by 0.2 per cent. Global markets did little to inspire investors, with European stocks dropping by around 0.8 per cent, while American equities finished a touch weaker.

Heavy losses from the miners today are holding the market back most. Australia's biggest mining company, BHP Billiton (BHP) is down by 1.6 per cent, the smaller Rio Tinto (RIO) is 2.2 per cent lower and iron ore focused miner, Fortescue Metals (FMG) is 2.4 per cent worse off. It's important to note that mining stocks significantly outperformed the broader market in the second half of 2013. BHP surged by 16 per cent between July and December while FMG jumped by 91 per cent. BHP, RIO and FMG combined are wiping out 10.88 pts from the All Ordinaries Index.

Canadian food giant Saputo has extended its $9 per share takeover offer for Australian dairy company Warrnambool Cheese (WCB) until January 22. WCB shares are up 0.55 per cent after rising by 157 per cent last year.

Qantas (QAN) is wiping out a large part of yesterday's gains, with the airline's shares down 1.1 per cent. QAN improved yesterday despite receiving its second credit downgrade in a month. QAN shares slumped by 26.5 per cent in 2013.

On the economic front today, a report showed that there was a 7.5 per cent surge in the number of newly built properties sold in November. Home sales slumped by 3.8 per cent in October.

Investors are bracing themselves for what is arguably the most important piece of U.S. economic news; non-farm payrolls. The report will be issued at 12.30am (AEDT) this evening; an hour before the U.S. market open. The creation of 194,000 jobs is expected, with a steady jobless rate at 7 per cent likely. A better (or worse) than forecast reading could result in speculation regarding the Fed's stimulus program. The Australian dollar and the sharemarket early next week could very well be influenced by these numbers.

At midday, 706 million shares were traded worth $1.1 billion. 355 stocks are higher, 364 are in the red and 248 are unchanged.

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