Australian Stock Market Report – Midday 1/22/14

MID-SESSION REPORT
(12pm AEDT)

The Australian share market is being sold off on Wednesday, following a mixed lead from Wall Street and despite European shares rallying to a fresh five and a half year high.

At lunchtime in the East, the All Ordinaries Index (XAO) is down 0.8 per cent.

Quarterly (December 2013) inflation data has been released today, and has come in on the high side. The main measure of inflation in Australia, the Consumer Price Index, rose 0.8 per cent in the fourth quarter of last year for an annual rise of 2.7 per cent, which was above expectations.

The Australian dollar has risen sharply on the CPI data and is buying US88.63c at lunchtime in the East

In company news, BHP Billiton (BHP) has announced it produced record volumes of coal and iron ore in the second half of 2013, thanks to productivity gains and the opening of new mines. Production across the company was up 10 per cent over the six months to December with BHP flagging a further 16 per cent increase in the two years to the end of the 2015 financial year. The numbers were a touch lower than what some analysts were expecting with BHP also being held back by a lower iron ore price. BHP shares are down 1.8 per cent at lunchtime in the East.

The battle for Warrnambool Cheese and Butter (WCB) looks to be over, with Canadian firm Saputo securing a majority stake in the company following a long drawn out takeover battle. Saputo has increased its stake in WCB to 52.702 per cent and has now increased its bid from $9 to $9.20 per share. Its offer period is now scheduled to close on February 4. WCB shares are firmer by 1.1 per cent at lunch to $9.41.

In other news, consumer sentiment fell 1.7 per cent to a reading of 103.3 in January according to the latest survey. The survey´s Unemployment Expectations Index increased by 0.7 per cent, following a 4.6 per cent rise in December.

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