Australian Stock Market Report – Midday 1/18/2013

MID-SESSION REPORT
(1.05pm AEDT)

The Australian sharemarket is improving for the fourth time this week, with the All Ordinaries Index (XAO) up 0.3 per cent or 12.8 pts to 4792.5. Over the past five sessions, the market has improved by around 1.5 per cent. Almost all sectors are high, with the exception of the utilities and the consumer staples. At first glance, the quarterly economic growth reading out of China came in a little better than expected, with the Chinese economy growing by 7.9 per cent over the past year.

Global markets rose overnight thanks to positive signs for the U.S housing market. Housing starts jumped by 12.1 per cent in December to a near 5-year high. This was well above forecasts. The number of Americans applying to receive jobless benefits for the first time last week fell sharply while results from the earnings season were mixed.

Australia's second biggest miner, Rio Tinto (RIO) has been in focus due to a $14 billion write-down on its aluminium and coal mining assets in addition to a change in management. Tom Albanese has held the top job for five years and is now being replaced by Perth based Sam Walsh, who is the head of its iron ore unit. RIO makes around 70 per cent of its income from its ore division. The write-down was linked to two of its biggest acquisitions: Alcan, a Canadian based aluminium producer and coal miner Riversdale Mining. Falling aluminium prices have also been partly blamed. RIO is up 3.13 per cent or $2.00 to $66.60.

Commodity prices rose overnight, which is helping most mining stocks improve after three straight sessions of losses. BHP Billiton (BHP) is up 0.5 per cent or 18 cents to $36.52 while Fortescue Metals Group (FMG) is up 3.3 per cent or 14.5 cents to $4.52.

Three of the big four banks are currently higher, while Westpac (WBC) is down 0.51 per cent or 13.5 cents to $26.48. National Australia Bank (NAB) is up 0.81 per cent or 19.5 cents to $26.23, Commonwealth Bank of Australia (CBA) is up 0.14 per cent or 8.5 cents to $62.54 and ANZ Banking Group (ANZ) edged higher by 0.16 per cent or 4.5 cents to $25.61.

Uranium miner Paladin Energy (PDN) is one of the better performers today and this week after announcing record sales. PDN shares are up 2.98 per cent or 3.5 cents to $1.21, taking the weekly gains to 15.79 per cent.

Following the start of daylight savings in October, major markets in the region will be trading between the hours mentioned below until April 2013.

The Hong Kong sharemarket trades in two sessions each day and will now open for trade between 12.30pm (AEDT) and 3pm (AEDT) while the second session is between 4pm (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 and 3.30pm (AEDT) for the first session and then between 5pm and 8pm (AEDT) for the second.

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

So far in trade at lunch, 904 million shares have been traded worth just $1.95 billion. 499 shares are up, 313 are lower and 350 are currently unchanged.

The Australian dollar (AUD) has shot higher (at least initially) following strong Chinese growth numbers. One AUD rose to US105.55 cents however minutes after the result pulled back to US105.3 cents, €78.8 cents and £66.01 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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