Australian Stock Market Report

LUNCHTIME REPORT
(12.10pm AEDT)

Last week the Australian share market ended lower closing out a hard week for investors. However this morning the market seems a bit brighter thanks to higher commodity prices over the weekend and no negative news hitting the screens. At lunchtime in the East, the All Ordinaries Index (XAO) is higher by 4pts to 4,364.

The London Metal Exchange (LME) listed slight gains on Friday especially in copper and this has helped our big name miners lead the way on the Aussie exchange. The S&P/ASX 200 Materials Index is currently up 0.02pct. BHP Billiton Limited (BHP) is slightly lower off 0.15 pct to $34.35.sectors, while Rio Tinto (RIO) is down 0.11 pct or 97 cents to $63.63. Rival iron ore player, Fortescue Metals Group Ltd (FMG) is up 1pct to $6.06. Australian gold producers are moving higher this morning after the US$20 an ounce run in the gold price on Friday night on the COMEX exchange in New York, to US$1,665 an ounce. Kingsgate Consolidated Limited (KCN) is up 1.6 pct and gold and nickel explorer Independence Group NL (IGO) one of the only stocks higher on Friday off slightly this morning.

Chemical and fertilisers producers Nufarm Limited (NUF) is up nearly 1.3 pct to $5.15, while Incitec Pivot Limited (IPL) has added 1pct.

Energy stocks higher following gains in US oil prices. Woodside Petroleum Limited (WPL) up 0.6pct to $35.58.

Qantas Airways Limited (QAN) has announced a joint venture with China Eastern today which will create a new budget airline called Jetstar Hong Kong, under a new agreement reached with China Eastern Airlines. Jetstar Hong Kong will serve short course flights in and around China and to Japan and South Korea. Qantas will begin flights in 2013 and Qantas share price is up 2.3 pc to $1.77, while its rival in the leisure travel market Virgin Australia Holdings Limited (VAH) is flat. On Friday administration firm Korda Mentha placed the struggling airline Air Australia into liquidation at a meeting of creditors in Brisbane. The airline ceased to fly and trade in early February when it did not have any free funds to pay for Jet fuel on returning flights from Hawaii and Phuket.

Elsewhere food manufacturer Goodman Fielder Limited (GFF) is up nearly 2 pct. Telstra Corporation Limited (TLS) is reasonably quiet in morning trade now at $3.25 up 0.31 pct. And after the strong run in the health care sector last week big name health care stocks are lower in morning trade, the S&P/ASX 200 HealthCare sector under pressure off 0.25pct, with blood and plasma maker CSL Limited (CSL) now down 0.3 pct to $34.12 and Ramsay Health Care Limited (RHC) is down 1pct.

Rail transport firm, QR National Limited (QRN) is off another 1.8pct in morning trade after its full year profit guidance downgrade on Friday. While rail rival Asciano Limited (AIO) is up another 0.8pct, and Toll Holdings Limited (TOL) higher by 1.5pct.

Banking stocks are mainly higher, with ANZ Banking Group Limited (ANZ) firmer by 0.4pct to $22.84 while Westpac Banking Corporation Limited (WBC) is up 0.3pct to $21.44 . QBE Insurance Group (QBE) has reversed Friday's gains to be down 2.9pct in early trade to $13.98. Bank of Queensland (BOQ) told the market it expects to post a loss of $91 million for the first 6 months for 2012 large because of a reduction in the value of its loan book. However the bank is working to cut costs and plans to raise $450 million through equity raisings, BOQ is down 0.68pct to $7.25.

The Australian dollar is currently buying US104.64c and €78.90c.

Juliana Roadley, CommSec Market Analyst

[Kick off your trading day with our newsletter]