Australian Stock Market Report - Midday 2/2/2012

MIDDAY REPORT
(12pm AEDT)

Australian shares have rebounded from yesterday's sell-off in early trade, following positive offshore leads. US and European markets rose overnight on solid economic data and on hopes the world's largest social media network, Facebook, would file for listing on the US share market. At lunchtime in the East, the All Ordinaries Index (XAO) is up 53.5pts or 1.2pct to 4344.5.

After the bell on Wall Street, Facebook filed papers for an IPO (Initial Public Offering) seeking to raise US$5 billion. Facebook, which now boasts more than 800 million users, didn't specify the number or price of shares it will offer and the $5 billion amount is a placeholder used to calculate fees and subject to change. Morgan Stanley, JPMorgan Chase, Goldman Sachs Group, Bank of America Corp, Barclays and Allen & Co have been hired to manage the IPO. It's likely US institutions will snap up the majority of the shares on offer in the IPO, however any Australian investor wanting to get in on the action should set up an international account.

Locally today, Wesfarmers (WES) has released quarterly sales figures, with sales at supermarket chain Coles up 6.7pct on the year to $9.4 billion. The Coles result looks solid and is in line with expectations. However sales at Wesfarmers Kmart and Target businesses were down in the quarter, while the Bunnings result also looked weak. Shares in WES are up 1.2pct to $30.07 in early trade.

The materials sector is the best performing on the market, with the S&P/ASX 200 Materials sector firmer by 2.1pct in early trade on the back of strong commodity prices.

The Australian dollar has also received a boost and is buying US107.31c, £0.677 and €81.39c.

At midday in the East, 648 million shares have changed hands, worth $1.56 billion. 557 are up, 214 are down and 329 are unchanged.

Juliette Saly, CommSec Market Analyst

[Kick off your trading day with our newsletter]