Australian Stock Market Report – Midday 3/19/14

MID-SESSION REPORT
(12.15pm AEDT)

The Australian sharemarket is modestly higher at lunch, with the All Ordinaries Index (XAO) up by 0.1 per cent. Investors are remaining on the sidelines as the U.S. central bank is halfway through its two-day monthly meeting. Global sharemarkets surged overnight as Russian President Vladimir Putin said he has no plans to seize other areas of Ukraine.

Strength from the miners, financials, property trusts and both consumer staple and discretionary industries is helping lift the market. All major markets globally should trade normally today as there are no public holidays while there is no major economic news expected to be released in Australia or the region.

Department store owner David Jones (DJS) is down 0.1 per cent despite posting a better than expected half year profit of $70.1 million. Total sales rose by 3.8 per cent while quarterly online sales have surged by 150 per cent (still makes up a small part of total sales). No profit guidance was provided. DJS is up by more than 10 per cent since the start of this year and 15 per cent firmer since announcing it was approached by Myer (MYR) for a potential merger at the end of January. MYR is up 0.94 per cent today and will be issuing its half-year earnings tomorrow.

Property group Stockland (SGP) is down 2.8 per cent today; however is till up 3.5 per cent this calendar year. It announced the acquisition of a 19.9 per cent strategic stake in Australand. The acquisition was made at an average price of $3.78 per share. Australand (ALZ) is currently trading at $3.89 and is up 1.04 per cent since 1 January.

The gold sector is continuing to be hit hard, with the price of the precious metal down 1 per cent (down 2 per cent this week). Investors expect the U.S. central bank to announce continued tapering of its US$65 billion per month stimulus package. Newcrest Mining (NCM), which slumped 7.6 per cent yesterday is up 3.5 per cent at lunch.

Australia's second largest newspaper publisher Fairfax (FXJ) is up 2.5 per cent, taking the gains this calendar year to 45.7 per cent. No major news has been issued by FXJ; however its shares have surged since the release of its half-year earnings last month.

At lunch, 1.08 billion shares have changed hands worth $2.84 billion. 401 stocks are higher, 363 are in the red and 307 are unchanged.

The Australian dollar is at close to a three-month high against the greenback, buying US91.1. The outcome of tonight's Federal Reserve meeting could be a driver of our currency tomorrow. The market's perception of relative calm in Ukraine is helping boost risk assets while pushing the Australian dollar higher.