Australian Stock Market Report – Midday 12/12/2012

MID-SESSION REPORT
(12pm AEDT)

The Australian sharemarket is improving for the fourth day running, making it the longest winning streak in over a month. The All Ordinaries Index (XAO) is up 0.4 per cent or 17.6 pts to 4598.9.

Global markets improved once again, with the European market hitting fresh 18-month highs. This was despite disappointing economic news in the U.S, with the trade deficit worsening to US$42.2 billion. Soybeans are the biggest agricultural export for the U.S while crude oil is the largest import. America consumes significantly more crude oil than any other nation, accounting for over 20 per cent of total consumption.

Shares in Europe continue to outperform most other markets, with Germany's DAX index up 28 per cent since the start of this calendar year, France's CAC40 is up 15 per cent, the DOW is 8.5 per cent higher while Australia's All Ordinaries Index is 12 per cent stronger.

Almost all sectors are trading in the black, with energy stocks, the miner, and healthcare players the best performers. Woodside Petroleum (WPL) is up 1.58 per cent or 53.5 cents to $34.44, while Santos (STO) is 1.27 per cent or 14 cents higher to $11.20.

The major banks are mixed with National Australia Bank (NAB) up 0.3 per cent or 7.5 cents to $24.77, Commonwealth Bank of Australia (CBA) up 0.21 per cent or 13 cents to $61.42, Westpac (WBC) largely unchanged and ANZ Banking Group (ANZ) slipping by just 0.58 per cent or 14.5 cents to $24.74.

A number of economic reports were released today, including the results from a consumer confidence survey, lending finance for October, credit and debit card statistics and a speech by the Reserve Bank Governor Glenn Stevens.

There was further proof today that the recent rate cuts have done little to make Australians feel more comfortable with their finances. The results of a consumer confidence survey have shown a 4.1 per cent slide in sentiment in December to 100.0. Any reading below 100.0 indicates pessimism. The results are based on a survey of around 1,200 Australians.

Looking ahead, tonight the OPEC Oil Ministers are meeting. OPEC stands for the Organization of the Petroleum Exporting Countries and is made up of 12 oil producing nations. Countries such as Saudi Arabia, the United Arab Emirates and Venezuela are members. It is headquartered in Vienna and has been for almost 50 years.

Also of importance will be the Federal Reserve's second day of its two day meeting tonight. This will be accompanied by the central bank's latest economic projections and monthly statement. Crude oil inventories and the U.S Federal Budget Balance (a report measuring government spending and income) will also be issued.

In the European region, the British unemployment rate is scheduled for release and is expected to rise from 7.8 per cent to 7.9 per cent according to most forecasts. Both German and French inflation is also expected, with a negligible rise in prices likely.

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 stronger start to trade tonight. The U.S market trades between 1.30am (AEDT) and 8am (AEDT).

So far in trade at lunch, 713 million shares have been traded worth $2.09 billion. 420 shares are up, 312 are lower and 330 are currently unchanged.

The Australian dollar (AUD) is stronger and buys US105.3 cents, €80.98 cents and £65.3 pence. The AUD is at its strongest against the greenback since September.

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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