Australian Stock Market Report - Midday
The Australian sharemarket opened slightly lower this morning after a selloff on the U.S. markets overnight. And news out half an hour before the open of the Australian markets that the China's State Information Centre ( a Chinese government think tank) had cut is Q3 gross domestic product GDP forecast to 9.2pct the third quarter, after only one quarter of trading, also reducing its expectations for third quarter CPI consumer prices numbers (inflation) to 3pct. The centre has previously forecast full-year growth of 9.5 pct. This report out only one week after the Chinese Electricity Council came out with a cut in their expectations for consumption from 22pct down to 5pct.
In the last hour of trade the monthly trade figures were realised and this boosted the markets and our dollar. Australia's trade surplus of $3.539 billion in June (at a record level) as exports gained 7pct and imports rose 2pct over the month. These numbers were much higher than expected, helped by lift in commodity prices especially coal and iron ore.
S&P/ASX 200 index off 0.2pct or 10pts to 4561.5 whilst the broader All Ordinaries index (XAO) down by 0.2pct or 9.2pts to 4577.4
The materials sector under pressure, off 0.17pct, after a slightly pull back in base metal prices on the London Metals Exchange overnight. BHP Billiton (BHP) off 0.7pct to $40.91 while Rio Tinto (RIO) just turning higher up 0.2pct to $73.17. Overnight Rio Tinto announced it will invest a further US$790 million in its drive to expand the annual capacity of iron ore operations in the Pilbara to 330 million tonnes. This brings total investment funds approved in recent weeks to US$1 billion. This will enable Rio to lift is planned output of iron ore and port facilities in the region.
In the building materials sub sector - Boral (BLD) told the market it has sold its "Precast Panels" business to Brickworks Limited (BKW) for $15 million. The sale, which includes all of Boral's precast businesses in NSW, Queensland, Victoria and Western Australia, is expected to be completed in mid August this year. Boral shares down 1.8pct to $4.36, while Brickworks up 0.67pct to $11.99.
Gold producers following the small rise in gold prices overnight, Newcrest Mining (NCM) up 1.2pct to $33.80 and the smaller gold player Lihir Gold (LGL) up 0.96pct to $4.20 .
Energy stocks doing well after the rise in the U.S. oil prices overnight, oil prices rose as the tensions in the Middle East increased, Crude oil prices rallied to three month highs overnight, helping the energy sector increase by 0.76pct. Shares in Nexus Energy (NXS) soared 23pct yesterday on speculation Royal Dutch Shell was planning a $480 million takeover for the company. NXS denied the rumours and today the shares gave back 2.67pct of yesterday's boost. Woodside Petroleum Limited (WPL) up 1.31pct to $42.45 and the energy sector service provider WorleyParsons Limited (WOR) off 0.09 pct to $23.50.
Miner Gloucester Coal Ltd (GCL) today announced its plans to cove to the market to raise $455 million to help pay for its planned purchase of a stake in the Queensland's Middlemount mine from Singapore-based mining and investment firm Noble. Gloucester plans to buy its 27.52pct stake in the mine for $269.5 million. GCL still in trading halt last traded at $12.47.
In the financial sector the big four banks are leading the index lower and adding pressure on the market. The insurer and wealth manager, AXA Asia Pacific Holdings Limited (AXA) today said its half year net profit to the ended June 2010 fell 19pct to $219.2 million, in line with AXA's own expectations that were only published 2weeks ago. AXA said funds under management, administration and advice fell by 3pct to $78.44 billion, but it did maintained its interim dividend at 9.25cents a share. AXA has conditionally agreed to a $13.29Bill buyout proposal from National Australia Bank (NAB). NAB shares down 0.44pct to $25.05. Westpac Banking Corporation (WBC) off 1.23pct to $24.00.
Retailer Kathmandu Holdings Limited (KMD) released its trading update today the outdoor apparel and camping goods retailer said its full-year consolidated sales were higher than expected and quoted in its IPO prospectus for m October 2009. But Kathmandu lowered its earnings guidance, adding that the trading conditions are currently tough in this retail environment in all its markets. KMD shares are off 12.2pct to $1.47. Woolworths (WOW) off 0.16pct to $25.71 while Wesfarmers (WES) was lower by 0.26pct to $31.21. Among consumer discretionary stocks, David Jones (DJS) losing a little more ground, in the wake of a $37 million lawsuit filed against the company this week. DJS off 2.5pct to $4.66 while Myer Limited (MYR) also down 1.7pct to $3.45.
West Australian Newspapers Holdings Ltd. (WAN) today said its full year net profit rose 10.3pct over the last year to, a record, $96.2 million, revenue at its core West Australian newspaper division fell 2.8pct with newspaper circulation revenue falling 5.4pct to $66.5 million. WAN's Chief Executive said "After seeing solid recovery in the second half of the year, when compared to the same period in 2009, we are faced with markets in a modest recovery phase" WAN shares off 1.57pct to $6.91.
One of yesterday's best performing stocks the education services provider, Navitas (NVT) is up 6pct yesterday and adding 1pct today, after announcing net profit for last financial year rose by 31pct to just over $64 million. NVT provides education programs in Australia, the UK, Canada, Sri Lanka, South Africa and Singapore.
The Australian dollar (AUD) higher today, 1 Aussie dollar will now buy you US91.44c and €69.10c