Australian Stock Market Report

MIDDAY REPORT
(12.20pm AEDT)

After the Australian market closed lower yesterday by 47 points or just over 1pct, this morning the All Ordinaries index (XAO) turned the corner opening up 34 points higher.

The mining sector the best performing sector this morning after a lift in commodity prices like; gold, oil, copper and aluminium overnight.

By lunchtime the All Ordinaries was up 42 points or 1 pct ahead of the release of China´s fourth-quarter economic growth report (GDP), retail sales and industrial production numbers out later today.

The S&P/ASX 200 Materials index (a measure of performance for companies in the mining sector) had added 1.6 pct as The world's largest miner BHP Billiton (BHP) added 1.25 pct or 45 cents to $36.43 while RIO Tinto Limited (RIO) up 1.02 pct to $65.55 as investors eagerly await RIO's fourth quarter operations review due out later today. Fortescue Metals Group Limited (FMG) up 3.46 pct ahead of its second quarter production report and after yesterday's news that Fortescue had upgraded its estimated magnetite resource. Grange resources (GRR) reported is quarterly output numbers today. Grange is currently Australia's leading magnetite producer. Today Grange said it increased production at higher concentrate levels and this had helping it lower its cost of production and increase margins, Grange shares up 0.92 pct to $0.55. OZ Minerals Limited (OZL) shares were also higher in early trade up 1.44 pct to $10.56, and Alumina Limited (AWC) gaining up over 2 pct.

In the energy sector, uranium producer Paladin Energy Limited (PDN) lead the gains after telling the market it had hit record uranium production over the last quarter. The company said production from both its sites in Namibia and Malawi totalled 1.82 million pounds in the December quarter, up 47 pct from the September quarter. Paladin shares up 9.8 pct or $0.15 cents to $1.68.

Oil prices increased overnight and continued to move higher in early Asian trade now at US$99.47 a barrel. Woodside Petroleum (WPL) is managing to record some modest gains at lunch, up 1.52 pct or $0.44 cents to $33.45.

The S&P/ASX 200 Financials index (a measure of performance for companies in the financial sector) rallied higher this morning, even with more negative broker reports and media expectations of cuts in staffing due to cutbacks in business activity. The Index was up 0.87 pct to 3,986. The four majors added over 0.5 pct each with National Australia Bank (NAB) up 0.7pct, ANZ Banking Group (ANZ) also up 0.7 pct or $0.16 cents to $21.02, Westpac (WBC) added 0.8 pct or $0.17 cents to $20.54 and Commonwealth Bank of Australia (CBA) lifted by 0.75 pct to $49.87.
After weakness in the insurance sector last week our major insurers regained more ground in morning trade with QBE Insurance (QBE) adding 3.37pct or $0.38 cents to $11.63 and Suncorp Group Limited (SUN) up nearly 1 pct to $8.33.

Yesterday the Construction firm, Leighton Holdings (LEI) has said that its underlying profit for the six months to December 2011 would be stronger than previously forecast. LEI shares continued to move higher again today up another 3.45 pct or $0.74 cents to $21.19.

The retail sector also reversed recent falls, the S&P/ASX 200 Consumer Discretionary adding 1.2 pct with department store owner David Jones Limited (DJS) up 0.8 pct or $0.02 cents to $2.34 while its competitor Myer Group Limited (MYR) up 1.23 pct or $0.02 cents to $2.05.

The Australian dollar (AUD) is steady against the U.S. Dollar, 1 Australian dollar will now buy you US103.37 cents and higher against the euro at €0.81.50 cents.

Juliana Roadley, CommSec Market Analyst

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