Australian Stock Market Report – Midday 1/22/2013

MID-SESSION REPORT
(12pm AEDT)

The Australian sharemarket continues to improve and is up for the fifth consecutive session. The All Ordinaries Index (XAO) is up 0.2 per cent or 11.7 pts to 4813.9. Shares have improved by around 3 per cent so far in 2013, which is not quite as strong as this time last year. Over the first 3 weeks of 2012, the local market had gained 4.5 per cent.

Global markets had a quiet session following the Martin Luther King holiday in the U.S. American markets will be trading for the first time this week tonight.

Almost all sectors are rising with the exception of the small Info Technology industry. Three of the four banks are higher, with National Australia Bank (NAB) the exception. Yesterday, National was the best performing major thanks to speculation Spanish bank, Santander could be interested in purchasing NAB's struggling British assets. Santander denied the claims today, which is pushing NAB down 0.26 per cent or 7 cents to $26.77. Westpac (WBC) is up 0.6 per cent or 16 cents to $26.64, Commonwealth Bank of Australia (CBA) is 0.23 per cent or 14 cents higher to $62.35. ANZ Banking Group (ANZ) is up 0.18 per cent or 4.5 cents to $25.73.

Investors are taking some of the shine off QBE Insurance's (QBE) strong gains yesterday, with its shares down 1.73 per cent or 21 cents to $11.93. There have been some reports that Australia's biggest insurer is looking at cutting around 700 jobs to reduce costs and improve competitiveness. One of QBE's problems has been exposure to international markets such as the U.S, New Zealand and Japan. Superstorm Sandy could potentially cost the company as much as US$450 million.

The miners are mostly stronger, with BHP Billiton (BHP) up 0.47 per cent or 17 cents to $36.70 while Rio Tinto (RIO) is 0.92 per cent or 61 cents higher to $67.08. Iron ore miner, Mount Gibson (MGX) is one of the better performers after issuing its quarterly activities report and recording a 52 per cent rise in iron ore shipments for the quarter. MGX shares are up 3.96 per cent or 3.25 cents to 85.25 cents.

There will be no major market moving economic data out today, however tomorrow should be more interesting. The latest quarterly inflation reading will be issued, which is an important component of the Reserve Bank's decision making process. The market is currently factoring in a 30 per cent chance of a rate cut on February 5th when the RBA will be meeting next. Inflation is likely to be well within the central bank's target inflation band of 2 per cent to 3 per cent.

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, 745 million shares have been traded worth just $1.22 billion. 352 shares are up, 390 are lower and 311 are currently unchanged.

The Australian dollar (AUD) buys US105 cents, €78.9 cents and £66.3 pence.

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.

[Kick off your trading day with our newsletter]