Australian Stock Market Report

MIDDAY REPORT
(12pm AEDT)

The Australian sharemarket is losing a little ground for the third straight session, with the All Ordinaries index (XAO) down 0.3 pct or 13.4 pts to 4312.3. Most sectors are currently trading in the red however the retail, healthcare and telco sectors are all edging higher.

The standout performer at lunch is Fairfax Media (FXJ) which is up 9.12 pct or 6.75 cents to 80.75 cents taking the gains this year to around 12 pct. This comes after Australian mining billionaire, Gina Rinehart is believed to be increasing her stake in the media giant to as much as 10 pct. FXJ is the country's oldest newspaper publisher and today's transaction could be worth as much as $200 million. So far today, around $168 million worth of shares have been traded in FXJ. Gina Rinehart is well on track to becoming the world's richest woman.

The mining sector is trading in the red with BHP Billiton (BHP) down 0.77 pct or 29 cents to $37.19 while RIO Tinto (RIO) is up 0.59 pct or 44 cents to $69.60. BHP makes up around 9 pct of the Australian sharemarket so has a significant impact on the direction of the XAO on any given day.

Three of the four major banks are currently weaker, with National Australia Bank (NAB) down 0.46 pct or 11 cents to $23.74, ANZ Banking Group (ANZ) is 0.47 pct or 10 cents lower to $21.31, Westpac (WBC) is 0.61 pct or 13 cents weaker to $21.02 while Commonwealth Bank of Australia (CBA) is managing to edge higher by 0.318 pct or 19 cents to $50.85.

On the economic front today, the number of new homes sold in December fell by 4.9 pct. This report is based on a survey of Australia's 100 largest builders. The report is released on a monthly basis by the Housing Industry Association (HIA). The organisation's Chief Economist, Dr Harley Dale said that " The intensification of bad news regarding Europe, question marks over labour market prospects in Australia, and avoidable delay and uncertainty as to whether banks were going to pass on the Reserve Bank's second rate cut conspired to drive a fall in new housing contracts as the holiday season approached."

In the region, China's latest manufacturing report will be released shortly which will give us an idea how well the manufacturing space is holding up in the world's second largest economy.

In the U.S, Mitt Romney has just won the Florida Republican primary.

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.

Markets in the region are mostly mixed, with Japan's Nikkei 225 index down 0.12 pct or 10.85 pts to 8791.66, while South Korea's KOSPI index is up 0.15 pct or 2.84 pts to 1958.63. Shares in the Philippines are a little higher.

So far in trade at lunch, 1.02 billion shares have been traded worth $1.85 billion. 371 shares are up, 403 are lower and 356 are currently unchanged. Activity remains light at lunch.

The Australian dollar (AUD) is buying US106.3 cents, €81.2 cents and £67.4 pence. The AUD is stronger against all the above currencies.

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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