Australian Stock Market Report

MIDDAY REPORT (12pm AEDT)

The Australian sharemarket is losing ground for the second straight day with the All Ordinaries index (XAO) down 0.3 pct or 14.8 pts to 4236.9. The market's two largest sectors, the miners and the financials are both weaker. The financial sector, which includes the big four banks, makes up more than 30 pct of the Australian market while the miners account for around 25 pct of its size.

One of the reasons for the losses in local trade is that the Federal Reserve (the central bank in the U.S) held its monthly meeting on monetary policy last night and gave no clear indication that further stimulus was on the cards. This resulted in a late selloff in American trade early this morning.

Index leader BHP Billiton (BHP) is one of the biggest drags on the market as its trading near its weakest level so far this month. BHP is down 0.81 pct or 30 cents to $35.52. Diversified mining giant, RIO Tinto (RIO) is managing to gain slightly by 0.29 pct or 18 cents to $62.94. The country's largest gold producer, Newcrest Mining (NCM) is also higher by 0.34 pct or 11 cents to $32.29 despite a weaker gold price.

Three of the big four banks are trading in negative territory, with Westpac (WBC) down 1.15 pct or 24 cents to $20.59 and is the worst of the majors. WBC is holding its Annual General Meeting (AGM) with shareholders today. Commonwealth Bank of Australia (CBA) is down 0.61 pct or 30 cents to $49.05, National Australia Bank (NAB) is down 0.1 pct or 3 cents to $23.73 while ANZ Banking Group (ANZ) is up 0.87 pct or 18 cents to $20.92.

Virgin Australia (VAH) is up 1.5 pct while the larger Qantas (QAN) is down 0.33 pct or 0.5 cent to $1.53. As part of VAH's alliance with Singapore Airlines, a new service was announced between Darwin and Singapore today starting from March 26 next year. The company was previously referred to as Virgin Blue (VBA) however has recently changed its ticker code to VAH. Virgin Australia has a market capitalisation (number of shares on issue multiplied by its current share price) of $750 million. QAN has a market capitalisation of $3.46 billion.

On the economic front, a report today has shown that Australians are around 8 pct less confident with the state of their finances and the broader economy than they were this time last month. The recent rate cuts did little to boost sentiment.

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 lower at lunch with Japan's Nikkei 225 index down 0.46 pct or 39.54 pts to 8513.27, South Korea's KOSPI is easing by 0.13 pct or 2.34 pts to 1861.72 while stocks in China are also down a touch.

So far in trade at lunch, 824 million shares have been traded worth $1.47 billion. 301 shares are up, 425 are lower and 316 are currently unchanged.

The Australian dollar (AUD) is weaker and buys US100.09 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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