Australian Stock Market Report – Midday 11/4/13

MID SESSION REPORT
(12.45pm AEDT)

The Australian sharemarket is modestly higher for the first time in three trading sessions. The All Ordinaries Index (XAO) is 4pts or 0.1 per cent firmer at lunch. Weakness from the energy, consumer staple, healthcare and telco sectors is holding back the gains, while the miners and financials are both supportive.

Westpac (WBC) is down 0.3 per cent after posting an 8 per cent or $500 million increase in annual profit to $7.1 billion. This was slightly better than market forecasts; was driven by lower than expected bad debts, a rise in income and cost cutting measures. An 88cps final dividend was declared together with a 10cps special dividend which will be paid out to eligible shareholders. Last week, ANZ recorded a $6.5 billion cash profit while National Bank (NAB) announced a 5.9 billion result.

Coca-Cola (CCL) is down by 4 per cent after warning it expects profit to fall by between 5-7 per cent over the year due to aggressive competition and discounting. CCL owns the Australian operations of Fanta, Sprite, Powerade, Pump and Mount Franklin.

Retail sales rose by a greater than expected 0.8 per cent in September, which is helping the retailers rise. David Jones is 4.6 per cent firmer and one of the standouts. Inflation is well contained according to the latest monthly jobs report. Consumer prices rose by just 0.1 per cent in October and 2.1 per cent for the year. The number of job ads fell by 0.1 per cent in October; however the report has lost some of its predictive power.

At lunch, 1.29 billion shares have changed hands, worth $1.87 billion. 412 stocks are higher, 411 are in the red and 327 are unchanged.

Looking ahead, in Australia this week the Reserve Bank's monthly meeting on rates and the Melbourne Cup both take place tomorrow. International trade is out on Wednesday and a jobs report will be issued on Thursday.

Across the region, Friday and Saturday will be highlights with Chinese trade together with inflation, production, investment and spending data all scheduled for issue.

In the US, quarterly GDP numbers will be out on Thursday while the most important monthly jobs report will be issued on Friday (non-farm payrolls).These could both impact the direction of the US dollar.

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