Australian Stock Market Report - Midday 2/21/2012

MIDDAY REPORT
(12pm AEDT)

The Australian share market is trading higher at lunchtime in the East, as investors await the outcome of talks between Eurozone finance ministers to secure a Greek rescue deal, and digest another busy day of results. The All Ordinaries Index (XAO) is firmer by 19.6pts or 0.5pct to 4352 in early trade.

The financial sector is firmer by 0.4pct with shares in the National Australia Bank (NAB) the best out of the big four, up 1.1pct to $23.44. Macquarie Group (MQG) is firmer by 1.4pct to $27.51.

Among the companies reporting today, travel agent Flight Centre (FLT) has reported a solid first half result and upgraded its full year guidance, thanks to the strong Australian dollar which has encouraged many consumers to take their holidays overseas. Profit for the six months to December 31 2011 came in at $81.6 million, up 15.7pct. Sales from airline and accommodation bookings rose 9pct to $6.18 billion. Flight Centre will pay shareholders an interim dividend of 41c per share, but says it is expecting costs of around $1 million due to the grounding of Air Australia last week after the company filed for involuntary administration. FLT also expects full year profit to rise by 10-18pct to $270-$290 million. FLT shares are firmer by 3pct to $21.32 in early trade.

Diversified property group Mirvac Group (MGR) has ported a 1H profit of $176.6 million, versus a $12.7 million loss in the previous corresponding period. MGR shares are up 0.8pct to $1.215.

While Onesteel (OST) says it's considering a name change to reflect the fact its business is now mining, mining consumables and steel. The company has reported a 1H $74 million loss but remains bullish about growth in the second half. OST shares are firmer by 13.7pct to $0.83 in early trade.

Minutes from the Reserve Bank of Australia's February board meeting have been released today and reveal Australia´s inflation outlook leaves room for another cash rate cut. However the central bank would only be looking at an easing of monetary easing if demand conditions were to wind back significantly.

The Australian dollar is buying US107.31c, £0.6779 and €81.16c.

Juliette Saly, CommSec Market Analyst

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