Australian Stock Market Report

MIDDAY REPORT
(12pm AEDT)

The Australian sharemarket is gaining for the first time this week, with the All Ordinaries index up 0.7 pct or 28.9 pts to 4315.3. The question remains if we can hold onto these gains for the whole session.

There was no shortage of data, conferences and summits taking place overnight across the globe. The U.S Federal Reserve (America's central bank) kicked off its two day monthly meeting on monetary policy and interest rates last night. A number of big names posted their profit results in the U.S including Apple (AAPL;us) which blitzed market expectations and posted a staggering US$13 billion profit between October and December 2011.

The International Monetary Fund (IMF) also cut growth forecasts for the global economy from 4 pct to 3.3 pct for this current calendar year.

The financials are the best performers at lunch and are contributing most significantly to the gains. Westpac (WBC) is up 3.21 pct or 66 cents to $21.24, Commonwealth Bank of Australia (CBA) is up 2.21 pct or $1.09 cents to $50.89, ANZ Banking Group (ANZ) is 1.29 pct or 27 cents higher to $21.22 and National Australia Bank (NAB) is 1.14 pct or 27 cents stronger to $23.99. Last night, U.S banks were mixed while the European banks were hit hard and dragged markets into the red.

The energy sector and consumer discretionary stocks are both losing a little ground at lunch with oil and gas producer Santos (STO) down 0.52 pct or 7 cents to $13.51 while the retailers are mixed. JB Hi-Fi (JBH) is one of the worst, down 2.5 pct or 30 cents to $11.72 while department store owner, David Jones (DJS) is up 1.28 pct or 3 cents to $2.37.

On the economic front today, the latest Consumer Price Index (CPI) has edged higher by a seasonally adjusted 0.2 pct which was largely in line with expectations. This will likely make the Reserve Bank of Australia (RBA) feel more comfortable to cut interest rates from the current 4.25 pct next month if it considers it necessary to do so.

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.

A number of markets are closed in the region due to the Lunar New Year public holidays; however the South Korean market comes back online today. Japan's Nikkei 225 index is up 0.58 pct or 51.39 pts to 8836.72 while shares in the Philippines are currently down by around 0.7 pct.

So far in trade at lunch, 694 million shares have been traded worth $2.92 billion. 368 shares are up, 352 are lower and 349 are currently unchanged. Activity has picked up a little today as yesterday was options expiry.

The Australian dollar (AUD) is buying US105.1 cents, €80.6 cents and £67.3 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.

Steven Daghlian, CommSec Market Analyst

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