Australian Stock Market Report – Midday 11/5/13

MID-SESSION REPORT
(12.30pm AEDT)

The Australian share market is reporting solid gains at lunchtime in the East, ahead of this afternoon's interest rate decision where the Reserve Bank of Australia is expected to leave the official cash rate on hold at 2.5 per cent.

The All Ordinaries Index (XAO) is firmer by 0.7 per cent with strong support from energy and financial stocks after falls yesterday.

We are expecting trading volumes could fall off in the afternoon session as the race that stops the nation also slows the market. It is a public holiday in Victoria for Melbourne Cup day while traders and investors are also expected to down tools in the afternoon session.

Overnight, Wall Street recorded modest gains although shares in Blackberry plunged more than 16 per cent after the company abandoned plans to put the business up for sale.

In company news, Treasury Wine Estate (TWE) shares are firmer by 0.1 per cent to $4.655 despite shareholders beginning legal action against the global wine maker for allegedly breaching disclosure obligations over writedowns. Shareholders are alleging that Treasury Wines misled the market and breached its continuous disclosure obligations in relation to the financial impact of over-stocked US distributors which it announced to the market on July 15.

The Australian dollar is well supported ahead of the RBA rate decision. The AUD is buying US95.07c, £0.5951 and €70.39c.

So far, a total of 766 million shares have changed hands, worth $1.3 billion. 479 are up, 285 are down and 303 are unchanged.

Asian markets are generally firmer in the morning session. Japan's NIKKEI Index is up 0.5 per cent while the TOPIX is firmer by 0.2 per cent. The Korean KOSPI is weaker by 0.3 per cent.

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