Australian Stock Market Report - Midday 3/1/2012

MIDDAY REPORT
(12pm AEDT)

The local share market is experiencing a heavy sell-down today, losing all of yesterday's gains in the first few minutes of trade. US and European markets fell overnight after US Federal Reserve Chairman Ben Bernanke failed to mention another round of economic stimulus, or QE3. At lunchtime in the East, the All Ordinaries Index (XAO) is down 31.9pts or 0.7pct to 4356.2.

Most sectors are trading lower, with particular weakness coming from the energy and mining sectors. Shares in Rio Tinto (RIO) are down 1.6pct in early trade to $66.35 while the ANZ (ANZ) is down 0.9pct to $21.76.

Retailer Woolworths (WOW) has today reported a 16.8pct fall in first half net profit after tax to $966.9 million. The result for the six months to January 1, 2012 was above expectations and due to the restructure of the Dick Smith chain. Woolworths says trading conditions are likely to remain subdued for the rest of the year, and will pay an interim dividend of 59c per share, up from 57c in the previous corresponding period. WOW shares are up 0.4pct in early trade to $25.41.

Economic data today showed new private capital expenditure fell 0.3pct in real terms, seasonally adjusted, in the December
quarter. The median market forecast was for a rise of 4pct.

Building approvals rose 0.9pct in January, also below forecasts.

The Australian dollar is buying US107.36c, €80.54 and £67.44c.

Juliette Saly, CommSec Market Analyst

[Kick off your trading day with our newsletter]