Australian Stock Market Report

MIDDAY REPORT (12pm AEDT)

The Australian sharemarket is losing ground for the second time this week, with the All Ordinaries index down 0.1 pct or 4.8 pts to 4272.9. This is despite gains from both European and U.S markets overnight.

Commodity prices rose strongly overnight which is helping support our miners in early trade. The price of oil rose above US$100 barrel once again while the price of gold also jumped by around 1.5 pct overnight. The world's largest mining company, BHP Billiton (BHP) released its second quarter (October to December 2011) production report today. Production was modestly above expectations across the board. BHP Billiton (BHP) is up 0.3 pct or 11 cents to $36.81 while the smaller RIO Tinto (RIO) is up 0.56 pct or 37 cents to $66.07.

The bad news in the retail space continues with Christmas sales for Specialty Fashion Group (SFH) and Country Road Limited (CTY) both disappointing. SFH operates brands such as Katies and is down by more than 8 pct at lunch. The S&P/ASX 200 Consumer Discretionary index flat after a few hours of trade. CTY released its half yearly trading update after market close yesterday (July to December 2011) with the result missing market expectations. Sales over the second half of last year fell by over 10 pct. CTY shares have not reacted due to the company's shares being almost completely owned by both Woolworths (WOW) and Australian Retail Investments. WOW owns 87 pct of the company.

The financials are a touch weaker at lunch, however two of the big four banks are managing to trade a little higher. Westpac (WBC) is up 0.44 pct or 9 cents to $20.75 while Commonwealth Bank of Australia (CBA) is up 0.38 pct or 18 cents to $50.02. ANZ Banking Group (ANZ) is down 0.9 pct or 19 cents to $20.86 while National Australia Bank (NAB) is easing by 0.71 pct or 17 cents to $23.86.

On the economic front today, the latest consumer sentiment reading was released and has showed that the average Australian is more confident this month than they were back in December last year with the state of their finances and the economy. The two rate cuts last year seems to have helped mortgage holders feel better about their finances with the Westpac Consumer Sentiment reading edging higher by 2.4 pct.

Following the start of daylight savings at the start of October, major Asian markets will be trading between the hours mentioned below until April next year (note that over the next month, some of the times might be slightly off due to several countries in the region changing their clocks at differing periods).

The Hong Kong sharemarket trades in two sessions each day and will now open for trade between 1pm (AEDT) and 3.30pm (AEDT) while the second session is between 5.30pm (AEDT) and 7pm (AEDT).

Out of Japan, the first session will be between 11am (AEDT) and 1pm (AEDT) while the second session is between 2.30pm (AEDT) and 5pm (AEDT).

The Singapore exchange will be open for trade between 12pm (AEDT) and 3.30pm (AEDT) for the first session and then between 5pm (AEDT) and 8pm (AEDT) for the second.

The major Asian markets are mixed so far today with Japan's Nikkei 225 index down 0.11 pct or 9.41 pts to 8456.99 while South Korea's KOSPI index is up 0.1 pct or 1.81 pts to 1894.55.

So far in trade at lunch, 666 million shares have been traded worth $1.43 billion. 326 shares are up, 386 are lower and 302 are currently unchanged.

The Australian dollar (AUD) is buying US103.8 cents.

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.

Steven Daghlian, CommSec Market Analyst

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