Australian Stock Market Report – Midday 11/7/2012

MID-SESSION REPORT
(12.30pm AEDT)

The Australian sharemarket is improving for the fourth straight day and for the seventh time in eight sessions, with the All Ordinaries Index (XAO) up 0.3 per cent or 12.3 pts to 4516. Almost all sectors are higher; however volume of shares traded remains light ahead of the results from the U.S Presidential elections.

Since President Obama took office four years ago, the U.S market has jumped in value by around 60 per cent while the XAO has gained by a more modest 31 per cent over the same period. The market has historically performed better when the Democrats have held power.

The mining, energy and financial sectors are all up by around 0.3 per cent, with Rio Tinto (RIO) up 0.57 per cent or 34 cents to $59.84 while the larger BHP Billiton (BHP) is 0.07 per cent or 2 cents higher to $34.83. BHP has indicated it's planning for a successor to Marius Kloppers as he approaches six years in the top job (Chief Executive).

BHP makes up more than 8 per cent on its own, is the biggest company on the Australian sharemarket and the world's largest miner. It has significantly underperformed the XAO this year, up by just 1.1 per cent since January while the broader market is up 9.7 per cent.

Media giant Newscorp (NWS) is up 3.15 per cent or 73.5 cents to $24.09 after its first quarter profit almost tripled to $2.23 billion. It received a boost by selling NDS, a software company for US$1.4 billion in July. NWS shares are up 34.3 per cent this calendar year.

Wealth manager, Yellow Brick Road (YBR) has entered a trading halt at the request of the company due to speculation of a distribution deal with a major financial institution. YBR could remain in a halt until Friday or when an announcement is made. YBR shares are down 15 per cent this year. Three of the four major banks are improving with National Australia Bank (NAB) the only major to be losing some ground, down 0.32 per cent or 8 cents to $24.97.

On the economic front, the Performance of Construction Index was issued and continues to show weakness in the construction sector. There has been a slight improvement in the state of the industry, however it certainly isn't pointing to significant expansion.

U.S futures are currently pointing to a slightly lower start to trade tonight. The U.S market trades between 1.30am (AEDT) and 8am (AEDT).

So far in trade at lunch, 684 million shares have been traded worth $1.49 billion. 397 shares are up, 326 are lower and 325 are currently unchanged.

The Australian dollar (AUD) is weaker and buys US104.1 cents, €81.4 cents and £65.2 pence.

The AUD is the world's fifth most traded currency behind the U.S dollar, the Euro, Japanese Yen and British Pound. The AUD accounts for around 7 pct of all foreign exchange trades.

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