Australian Stock Market Report - Midday 3/16/2012

LUNCHTIME REPORT
(12.20pm AEDT)

All Ordinaries Index (XAO) closed 9 points lower yesterday, but after another strong session in the U.S and with European markets hitting a fresh 8-month high, our market opened higher this morning. But it have already fallen into the red and by lunchtime The All Ordinaries Index (XAO) had lost ground and is currently off 0.23 pct or 10 points to 4356.7. Volumes are very light and are expected to stay that way throughout the day ahead of a raft of key economic data out in the U.S. tonight and next week.

Yesterday, the mining sector was the biggest drag on trade, as a stronger US dollar pushed base metal and precious metal prices down. Overnight gold, silver and base metal prices regained some lost ground with gold adding US$16 an ounce to US$1,660 an ounce. Base metals prices generally rose by 1.0-1.3 pct, on the London Metals Exchange (LME), as the US dollar lost ground against major currencies and copper added 1.3 pct. on the Comex Exchange in New York.

BHP Billiton (BHP) shares were lower in early trade today on news that the Port and mining communities surrounding Port Hedland in Western Australia prepares for the possible evacuation as tropical Cyclone Lua heads toward the Pilbara coast.
BHP shares are off 0.88 pct. to $34.87 and Fortescue Metals (FMG) off 2.01pct or 12 cents to $5.86, while Rio Tinto (RIO) are is slightly higher.

The gold producers struggled yesterday but have started to regain some ground this morning. Australia's largest listed gold miner, Newcrest Mining Limited (NCM) came up 0.1 pct. to $30.30. St Barbara Limited (SBM) up nearly 1 pct. to $2.11, Kingsgate Consolidated Limited (KCN) up 1.67 pct. and Alacer Gold Corporation (AQG) higher by 0.42pct.

Cash is going into health care, telecommunication and food and beverage retail stocks. Wesfarmers Limited (WES), owner of Coles and Bunning's stores is up 0.07 pct. to $28.88 and Woolworths Limited (WOW) up 0.7 pct to $25.72, while Telstra having a nice run in early trade up $1.50 to $3.26.

Department store retailer Myer Holdings (MYR) hit again today after it announced a weaker than expected sales and profit result yesterday. Net Profit after Tax (NPAT) of $88million, off 17.5%, and sales down 3 pct. Myers shares fell 3.3 pct. yesterday and now down 2.6 pct to $2.23. Myer rival in the discretionary retail space David Jones Limited (DJS) shares are lower by 0.4 pct to $2.74 and shares of shopping mall operator Westfield Group (WDC) down 1.2% to $8.76.

S&P/ASX 200 Financials Index off 0.26 pct or 10 index points. The big 4 banks mixed with Commonwealth Bank of Australia (CBA) off 0.5 pct or 33 cents to $48.73, ANZ Banking Group (ANZ) up 0.31pct to $22.35, and National Australia Bank (NAB) only slightly higher. Moody´s cuts Macquarie Group Ltd.´s (MQG) senior debt rating to A3 from A2 and Mac shares off 0.44 pct to $27.30 a share.

No major economic data was released in the region today.

Juliana Roadley, CommSec Market Analyst

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