Australian Stock Market Report – Midday 3-12-13

MID-SESSION REPORT
(12.45pm AEDT)

The local share market is trading slightly lower at lunchtime in the East, despite a positive start and another record high on Wall Street overnight.

US stocks rose as investor optimism starts to rebound. The so-called VIX or volatility gauge fell to a five year low overnight.

European markets were mixed on news the Italian economy contracted again in the December quarter, to be 2.8% weaker over 2012.

Locally, mining stocks are the biggest drag. West African sources have claimed Rio Tinto (RIO) is winding back its multi-billion dollar investment in Guinea's Simandou iron ore project due to slow progress and has slashed staff. There's been no confirmation from RIO but its share price is down more than 1% today. Index leader BHP Billiton (BHP) is also weaker.

Financial stocks are generally firmer, with the National Australia Bank (NAB) up 1.6% to $32.14.

Retailers are mixed, with Kathmandu (KM) a strong performer, up 1.3% to $1.985 and Wesfarmers (WES) firmer by 0.2% to $42.95.

In economic news today, Australian business confidence and conditions fell in February. According to the NAB survey, conditions fell to a reading of minus 3 last month, compared to a reading of minus 2 in January. Meanwhile confidence is holding at a reading of plus one, down from a reading of plus 3 in January.

The Australian dollar is stronger against the major currencies and at lunchtime in the East is worth US102.81c and 78.8 Euro cents. The Aussie has hit a new record, or 28 year high, against the British pound and is buying 69 British pence.

790 million shares have changed hands so far, worth $1.8 billion.

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