Australian Stock Market Report – Midday 12/14/2012

MID-SESSION REPORT
(12pm AEDT)

The Australian sharemarket continues its strong run, with the All Ordinaries Index (XAO) improving for much of the morning for the sixth consecutive session. The XAO is currently only up by a very modest 1.6 pts.

The energy sector, the miners, industrials and healthcare stocks are trading lower at lunch, while the financials, telcos and consumer staples are helping lift the broader market slightly higher.

The world's biggest mining company, BHP Billiton (BHP) is down 0.33 per cent or 12 cents to $35.88 while the smaller, more iron ore focused Rio Tinto (RIO) is down 0.75 per cent or 47 cents to $62.28.

The four major banks kicked off the session higher however are now trading mixed. Commonwealth Bank of Australia (CBA) is the best after two hours of trade and is improving by 0.62 per cent or 38 cents to $61.66. National Australia Bank (NAB) is up 0.45 per cent or 11 cents to $24.71, ANZ Banking Group (ANZ) is 0.1 per cent or 2.5 cents stronger to $24.70 while Westpac (WBC) is down 0.23 per cent or 6 cents to $25.92.

NSW based coal producer, Whitehaven Coal (WHC) announced plans to reopen a key rail line on the east coast of Australia next week. WHC shares are down 1.7 per cent or 5.5 cents to $3.17, taking the losses for this calendar year to 34.5 per cent.

In other business news, the Victorian government said it will make $750 million in budget cuts over the next four years and is forecasting a small surplus this financial year.

No major economic news is expected to be released in Australia today, however a number of reports are scheduled to be issued in the region. Manufacturing readings from our two largest trading partners; China and Japan are the biggest focal points for the market. Japanese manufacturing data was disappointing once again,

Looking ahead, the European Council will be meeting tonight for day two of its meeting, French German and Eurozone manufacturing data will be out later this evening in addition to the latest monthly inflation reading across the Eurozone.

In the U.S, inflation and industrial production numbers will be issued.

This has been an eventful week for markets, with both National Australia Bank (NAB) and Westpac (WBC) holding Annual General Meetings (AGMs) with shareholders, a report showed that over 1 million new motor vehicles were sold over the past year, America's central bank vowed to keep rates at close to zero until the jobless rate reaches 6.5 per cent and European leaders have been meeting in Brussels.

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, 615 million shares have been traded worth $1.21 billion. 370 shares are up, 358 are lower and 308 are currently unchanged. It is an extremely quiet session of trade so far ahead of China's manufacturing reading.

The Australian dollar (AUD) is weaker and buys US105.1 cents, €80.4 cents and £65.3 pence. The AUD is still relatively close to trading at its strongest levels 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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