Australian Stock Market Report – Midday 1/8/2013

MID-SESSION REPORT
(12.30pm AEDT)

Following a modest pullback yesterday, the Australian sharemarket is back in the black at lunch with the All Ordinaries Index (XAO) up 0.1 per cent or 2.8 pts to 4740.9. Yesterday the XAO slipped by around 0.1 per cent, however local shares are still up 1.75 per cent so far in 2013 (after five sessions of trade).

Global markets ended mostly lower last night, with the Dow easing 0.38 per cent, Germany's DAX down 0.56 per cent while France's CAC40 fell by 0.68 per cent. Last week, most investors reacted well to the temporary solution agreed on by the U.S Congress. The benefits have been short lived however, with the debt ceiling now a fresh concern for markets. Shares in Europe are still close to 22-month highs while the S&P500 index (a measure of the 500 biggest companies on the American markets) isn't far off five-year highs.

Locally two of our largest sectors; the miners and financials are losing ground while most other regions of the market are in the black. Australia's three biggest iron ore producers; Rio Tinto (RIO), BHP Billiton (BHP) and Fortescue Metals Group (FMG) are all trading in the red. FMG is down 1.84 per cent or 9 cents to $4.79, RIO is down 1.48 per cent or 99 cents to $66.41 while BHP is easing by 0.08 per cent or 3 cents to $37.78.

The price of iron ore cracked through the US$150 a tonne mark, with the rise in the metal helping our miners rise in recent weeks. Iron ore prices are up 30 per cent since the start of December 2012. Rio is up 14.5 per cent, BHP is up 10 per cent and FMG is up around 23 per cent over that same period.

The major banks are also holding back the rest of the market, with three of the big four trading lower. Commonwealth Bank (CBA), which is the country's second biggest company behind BHP is down 1.34 per cent or 84 cents to $61.76. ANZ Banking Group (ANZ) is down 0.37 per cent or 9.5 cents to $25.32 and National Australia Bank (NAB) is easing by 0.12 per cent or 3 cents to $25.27. Westpac (WBC) is up 0.57 per cent or 15 cents to $26.43.

Property group Lend Lease (LLC) is up 2.76 per cent or 26 cents to $9.69 and is adding to last year's 29 per cent improvement. LLC received a broker upgrade today.

On the economic front, as expected Australia recorded yet another trade deficit in November of around $2.6 billion. This didn't have an adverse impact on the local sharemarket however.

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, 626 million shares have been traded worth just $1.65 billion. 360 shares are up, 388 are lower and 319 are currently unchanged.

The Australian dollar (AUD) is stronger and buys US104.9 cents, €80.06 cents and £65.1 pence. The AUD has lost significant ground overnight, falling from

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.

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