Australian Stock Market Report

MIDDAY REPORT (12.30pm AEDT)

Yesterday, The Australian Stock market ended higher, All Ordinaries index (XAO) gaining 1.1 pct or 44.2 pts to 4155.2. The market started off stronger this morning up 1.2pct at the open of trade.

European markets closed at a 5 month high, boosted by overseas manufacturing data and strong German employment numbers. The U.S. markets traded higher, money going into mining and manufacturing stocks and the banks with the S&P KBW U.S. banking index adding 3.3pts overnight.

At lunch, The All Ordinaries Index (XAO) continued to move higher up 95 points or 2.3pct to 4,250 points. All sector moved higher with the best performers yet again being in the materials and industrial sectors. The industrial sector boosted by gains in mining service stocks.

The S&P/ASX 200 Materials index rallied from the open and at lunch was up over 3.5pct. Higher base metal prices (industrial metals) on the London Metals Exchange (LME) also boosted key Australian miners on overseas markets overnight. RIO Tinto (RIO.L) share prices rose 6.4 pct while BHP Billiton (BHP.L) up 6.2pct.

Today on the Australian markets RIO has added 3.31 pct to $63.43 and BHP up 4.11 pct or 1.43 cents to $36.23. Fortescue Metals Group Ltd (FMG) up 3.85 pct or $0.17 to $4.58 . OZ Minerals Limited (OZL) shares up 5.1 pct to $10.70. Steel stocks also higher, OneSteel Limited (OST) up 7.75 pct to $0.76 and BlueScope Steel Limited (BSL) up 4.88 pct to $0.43.

The price of gold continued its upward trend overnight adding another US$34 an ounce to above US$1,600 an ounce. Silver and platinum prices also rallied with the US dollar price of silver ending 5pct higher to US$29.57 an ounce and platinum at US$1,432.50 an ounce. Our largest listed gold miner Newcrest Mining Limited (NCM) shares up 2.31 pct to $31.41. St Barbara Limited (SBM) added 5.25 pct to $2.10 while PanAust Limited (PNA) increased 3.68 pct to $3.38. Gold One International Limited (GDO) up 7.14pct to $0.52 cents.

World crude oil prices rose on Tuesday night in response to stronger global economic data, a weaker U.S. dollar and mounting tensions between the US and Iran. The S&P/ASX 200 Energy Index up 2.81 pct, Woodside Petroleum Limited (WPL) up 3.36 pct to $31.72 and Santos Limited (STO) added 2.67pct or $0.33 to $12.67. Worley Parsons Limited (WOR) one of Australia's largest oil & gas, mineral & metals industries service providers up 4.5 pct or $1.16 to $26.96.

The S&P/ASX 200 Industrial Sector were higher, Transpacific Industries Group Limited (TPI) reversed yesterday's slide up 1.9 pct to $80 cents and Sydney Airport (SYD) up 1.49 pct to $2.73 and Qantas Airlines (QAN) up 4.05 pct to $1.54.

Defensive stocks were under pressure the retail investment stocks, basic retailers and utility stocks listing losses or small gains. In the health care sector, blood and plasma maker CSL Limited (CSL) slightly higher after yesterday's falls at $32.32. ResMed Incorporated (RMD) is one of the weaker stocks on the market off 0.80 pct to $2.48. Blackmores Limited (BKL) and Ansell Limited (ANN) also lower.

The S&P/ASX 200 Consumer Discretionary sector (discretionary retailers) added 2.15pct. After continual weakness department store owner Myer (MYR) rallied from the open of trade and by lunch had added 3.36pct to $6.50 and rival David Jones (DJS) up 4.31 pct to $2.42. Harvey Norman (HVN) reversed yesterday's falls up 3.31 pct to $1.87. While online accommodation, activity and flight booking services company, Wotif.com Holdings Limited (WTF) added 0.84 pct to $3.60. Webjet Limited (WEB) moved in the other direction off 0.82pct to $2.43.

Media sub sector has performed well, helped by lift in News Corporation (NWS) shares and Fairfax Media (FXJ) Limited added 3.4pct.

The S&P/ASX 200 Financials index also higher up 1.8 pct, the four major banks leading the way. Westpac (WBC) up 1.69 pct or 34 cents to $20.50. National Australia Bank (NAB) up another 2 pct and Commonwealth Bank of Australia (CBA) up 1.23pct to $50.22. While insurers QBE Insurance Group Limited (QBE) and Suncorp Group Limited (SUN) added around 2pct.

Telstra Corporation Limited (TLS) higher by 1.5pct to $3.41.

The Australian dollar continued to move higher, 1 Aussie dollar will now buy you US103.53 cents and €79.34cents. The Aussie Dollar hit an all - time high against the Euro of €79.56 cents overnight.

Juliana Roadley, CommSec Market Analyst

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