Australian Stock Market Report – Midday 2/1/2013

MID-SESSION REPORT
(11.50am AEDT)

Following on from a quick pullback yesterday, the local market is improving for the 11th time in 12 trading sessions. The All Ordinaries Index (XAO) is up 0.7 per cent or 36.6 pts to 4937.6. The market is anticipating economic news out of China between 12pm (AEDT) and 12.45pm (AEDT) which could drive markets this afternoon.

Rio Tinto (RIO), Australia's second biggest mining company is up 1.43 per cent or 95 cents to $67.31 despite declaring Force Majeure (essentially representing a chance occurrence or unavoidable accident or event) at one of its coal mines due to flooding. This is a clause in many contracts that helps free both parties of their obligations in the case of a natural disaster or other 'act of god'.

Adventure retailer, Kathmandu (KMD) is up 5.37 per cent or 9.5 cents to 9.5 cents to $1.86 after saying it expects a better year than previously forecast. KMD issued a trading update to the market and said that total group sales for the first half of the year will be approximately $165.8 million, which is around $19 million more than the previous corresponding period last year. In local trade, KMD shares are up 18 per cent so far in 2013, which is adding to last year's 20.6 per cent rise.

The mining and financial sectors are contributing most significantly to the gains on the market today. Both industries combined make up the lion's share of the Australian market.

BHP Billiton (BHP) is up 1.12 per cent or 42 cents to $37.90 while iron ore miner, Fortescue Metals (FMG) is up by a more impressive 2.35 per cent or 11 cents to $4.79. Spot iron ore prices rose by around 1 per cent overnight.

The major banks are all trading in the black, with National Australia Bank (NAB) the best after receiving a broker upgrade and is now gaining by 2.05 per cent or 56 cents to $27.92. Westpac (WBC) is up 0.71 per cent or 20 cents to $28.23, Commonwealth Bank (CBA) is up 0.59 per cent or 38 cents to $64.83 while ANZ Banking Group (ANZ) is up 0.24 per cent or 6.5 cents to $26.65.

Global markets ended mostly lower last night, with shares in the U.S and Europe falling by around 0.5 per cent. Investors locked in profits and are also awaiting the all-important monthly jobs report which will tell us how many jobs were either created or lost last month in the U.S.

Time seems to fly by regardless if we're having fun or not. January is already behind us and there are only 333 days left in 2013. The All Ordinaries Index rose by 5.1 per cent in January; the second best start to a new year since 1994 and our best month in a year. Shares in North America jumped by 5.77 per cent; making it the best month of January in 19 years. Shares in Japan jumped by 7.1 per cent; the best start to a year since 1998 and Chinese equities rose by 5.1 per cent.

Malaysian markets are closed today due to the Federal Territory Day public holiday.

On the economic front, the latest Performance of Manufacturing Index for January was issued and shows that the industry is still contracting. The RP Data-Rismark report out this morning has shown that property prices rose by around 1.2 per cent in capital cities across the country. The improvement was largely driven by strong performances from the Sydney, Brisbane and Perth markets.

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, 641 million shares have been traded worth just $1.25 billion. 428 shares are up, 339 are lower and 301 are currently unchanged.

The Australian dollar (AUD) buys US104.4 cents, €76.7 cents and £65.7 pence.

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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