Australian Stock Market Report

MIDDAY REPORT (12.30pm AEDT)

Today is the first day of trading for the 2012 calendar year, The Australian Stock market ended the last day of 2011, 19 points lower. But today, after higher commodity prices and light trading in Europe the market opened stronger.

European markets closed higher helped by stronger than expected German Manufacturing numbers, Germany is the largest economy and manufacturing country in Europe, so when its manufacturing numbers show signs of improvement the markets rally. The markets were also helped by stronger-than-expected Chinese and India manufacturing (PMI) data for December, both released over the New Years break. London's GTSE was closed for the New Years break as were the U.S. markets.

In the last day of trading for the 2011 calendar year the U.S. markets ended weaker. The DOW Jones Industrial Index ended 69 points lower at 12,217 points. The tech heavy NASDAQ Index down only 8 points in very low trading.

At lunch, The All Ordinaries Index (XAO) continued to move higher up 45 points or 1.08pct to 4,156 points.
The S&P/ASX 200 Materials index rallied from the open and at lunch was the best performing sector up over 1.4pct. Official Government Chinese Manufacturing data for December was released on New Year's. The data was higher than the market had expected and this has helped to boost mining stocks today. Higher base metal prices on the last day of trading for the calendar year for the London Metals Exchange (LME) also boosted key stocks. RIO Tinto (RIO) share prices rose 2.34pct to $61.71 while BHP Billiton (BHP) up 1.66pct or 58 cents to $35.00. OZ Minerals Limited (OZL) shares have reversed Friday's losses up 2.2pct or 22 cents to $10.23.

Orica Limited (ORI), manufacturer of industrial and specialty chemicals, higher in early trade after news of the reopening of its Kooragang plant in New South Wales (NSW). Today the NSW Premier Barry O´Farrell said "Continued safety breaches at Orica Kooragang Island ammonium plant could result in the facility being closed down". Orica's share climbed 0.54pct to $24.36.

Gold turned higher on Friday ending its losing streak, rebounding of a five month low of US$1,540.90 to close US$25 an ounce higher. Newcrest Mining Limited (NCM), Australia's largest listed gold miner, rallied 3.31 pct to $30.58. St Barbara Limited (SBM) added 2.84 pct to $1.99 while AngloGold Ashanti Limited (AGG) still under pressure at $8.30.

S&P/ASX 200 Industrial Sector listing very mixed trading today. As higher oil price and the higher Australian dollar continues to hold back companies that have a very high exposure to both prices. Transpacific Industries Group Limited (TPI) down 2.45% to $0.79 cents and Sydney Airport (SYD) off 0.4 pct to $2.65. Health care stocks also lower because of the higher Aussie dollar with blood and plasma maker CSL Limited (CSL) off 0.6pct to$31.80.
The S&P/ASX 200 Consumer Discretionary sector (discretionary retailers) have performed a better so far today, now 0.35pct higher. Department store owner Myer (MYR) flat at $1.93 and rival David Jones (DJS) down 0.84 pct or 1 cents to $2.35. Other companies in the retail space are mixed today Discount retailer JB Hi-Fi (JBH) up 1.5pct at $11.42.

Harvey Norman (HVN) down 2.45 pct to $1.79. While online accommodation, activity and flight booking services company, Wotif.com Holdings Limited (WTF) has already reversed Friday's losses up 0.84 pct to $3.60.
Media sub sector has performed well, helped by at 0.33 pct lift in News Corporation (NWS) shares and Fairfax Media Limited added 2.78pct or 2 cents to $0.74.
The S&P/ASX 200 Financials index also higher, the four major banks leading the way Westpac (WBC) up 1.6 pct or 4 cents to $20.23. National Australia Bank (NAB) up 2 pct and Commonwealth Bank of Australia (CBA) up 1 pct to $49.75.
The oil price fell US$0.50c in the U.S. on Friday night but since then in electronic trade the oil price rose over 1pct to just over US$100 a barrel. The S&P/ASX 200 Energy Index up 0.55pct, Woodside Petroleum Limited (WPL) up 0.1 pct to $30.64 and Santos Limited (STO) added 0.45pct. Coal and uranium stocks also moved higher.

Telstra Corporation Limited (TLS) higher by 1 cent to $3.33 and Qantas Airlines (QAN) up 1.71pct to $1.48.

In economic news - the Australian Industry Group's Performance of Manufacturing Index for December was released. After showing contracting in the manufacturing sector for 8 of the last 9 months the index added 2.4 points in December to 50.2points from 47.8 points in November. Any reading above 50 points shows expansion in the sector. Although manufacturing is still broadly flat as the higher Australian dollar, cheap imported goods and lack-lustre demand continues to stifle the sector.

The Australian dollar is currently stronger at US102.69 cents and €79.26cents. The Aussie Dollar hit an all - time high against the Euro a few moments ago of €79.34 cents in early morning trade.

Juliana Roadley, CommSec Market Analyst

[Kick off your trading day with our newsletter]