Australian Stock Market Report – Midday 1/21/2013

MID-SESSION REPORT
(12pm AEDT)

Following a strong week for the local market, local shares were off to a positive start this morning. At lunch however, the All Ordinaries Index (XAO) is largely flat, down just 0.05 per cent or 2.2 pts to 4792.5. The XAO is one of the most popular ways for investors to measure Australian sharemarket performance. The local market rose by 1.3 per cent last week and rose on four occasions.

Most markets are likely to remain quiet today due to the Martin Luther King public holiday which will see American markets closed tonight.

Last week was an eventful one, with the unemployment rate rising to 5.4 per cent while 5,500 jobs were lost in December. Economic data out of China was mostly positive with GDP (growth) coming in at 7.8 per cent over 2012. The big shock to many investors however was the $14 billion write-down by Rio Tinto (RIO) in addition to its Chief Executive, Tom Albanese stepping down after five years in the top job.

The major banks are mixed, with National Australia Bank (NAB) up 1.59 per cent or 42 cents to $26.77, while ANZ Banking Group (ANZ) is up a few cents. Commonwealth Bank of Australia (CBA) and Westpac (WBC) are both down by 0.5 per cent.

The miners are mixed, with Newcrest Mining (NCM) rising strongly by 2.02 per cent or 46 cents to $23.46 while BHP Billiton (BHP) and Fortescue Metals (FMG) are holding the sector back. Both miners will be issuing quarterly production numbers this week.

There are a number of outperformers today however, including QBE Insurance (QBE) in addition to copper and gold producer, OZ Minerals (OZL). There have been some reports that QBE is looking at cutting 700 jobs to reduce costs and improve competitiveness while OZL is up on news of resource upgrades and a new copper discovery. QBE is up 2.47 per cent or 29 cents to $12.04 while OZL is up 2.88 per cent or 21 cents to $7.51.

On the economic front, the latest State of the States report was issued by CommSec. This is a quarterly measure of just how well the different regions of the country have been performing. As expected, Western Australia continues to lead the way forward, with the Northern Territory close behind thanks to huge gas projects. CommSec's Chief Economist, Craig James said that WA is the standout "...on construction work, retail trade, population growth, construction work done and equipment investment. It is second strongest on retail trade and housing finance and third strongest on unemployment and finished fifth on dwelling starts. Northern Territory is the next strongest of state and territory economies, with top rankings on overall economic growth and unemployment and is second strongest on retail trade and dwelling starts."

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.

So far in trade at lunch, 740 million shares have been traded worth just $1.28 billion. 459 shares are up, 373 are lower and 324 are currently unchanged.

The Australian dollar (AUD) buys US105.1 cents, €78.9 cents and £66.2 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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