Australian Stock Market Report

MIDDAY REPORT (12pm AEDT)

At lunch, the Australian sharemarket is gaining for only the second time in five days with the All Ordinaries index (XAO) up 1.3 pct or 55.6 pts to 4319.7. There was no shortage of news out over the weekend including the downgrade of three French banks and yet another European Summit took place in Brussels, Belgium.

Investors looked past the disappointment which accompanied the meeting of European leaders with solid gains were posted in the majority of global sharemarkets. Major global indices including the U.S, German, French and British all recorded improvements of up to 2 pct.

Australia's four largest banks are all higher with Commonwealth Bank of Australia (CBA) up 1.74 pct or 85 cents to $49.69, National Australia Bank (NAB) gained 1.08 pct or 26 cents to $24.28, Westpac (WBC) is 0.81 pct or 17 cents higher to $24.28 and ANZ Banking Group (ANZ) is up 0.72 pct or 15 cents to $21.00. This week, both WBC and ANZ are scheduled to hold their Annual General Meetings (AGMs) with shareholders.

The resource sector is improving strongly with mining giant BHP Billiton (BHP) up 2.36 pct or 84.5 cents to $36.70 while its competitor RIO Tinto (RIO) 1.24 pct or 79 cents higher to $64.59. The gold producers are gaining with the country's largest gold miner Newcrest Mining (NCM) edging higher by 0.33 pct or 11 cents to $33.17.

On the economic front today, the latest report on housing finance and Australia's trade balance are both released. The housing finance report measures the change in the number of new loans issued for owner-occupied homes while the trade balance measures the difference in value between exported and imported goods.

On the political front, Australian Prime Minister Julia Gillard is expected to announce a new look front bench later in the day.

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.

Asian markets are mostly higher at lunch, with Japan's Nikkei 225 index up 1.25 pct or 106.64 pts to 8643.1 while South Korea's KOSPI index is up 0.93 pct or 17.5 pts to 1892.25.

So far in trade at lunch, 757 million shares have been traded worth $1.21 billion. 525 shares are up, 208 are lower and 306 are currently unchanged.

The Australian dollar (AUD) is weaker and buys US101.8 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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