Australian Stock Market Report - Midday 3/29/2012

LUNCHTIME REPORT
(11.45 am AEDT)

Yesterday Australian stocks closed at their highest levels in almost five months but today investors are selling. Overall the Australian market is still performing a lot better than expected. Overnight end of quarter and end of month trading along with weak economic data out from the UK and US sent stocks lower. The All Ordinaries Index (XAO) is currently only down by 2pts to 4,433 points.

Overnight commodity prices were hit by the weaker than expected durable goods number in the States.
The COMEX gold prices fell over 2pct to US$1,664 an ounce, so far this morning our largest listed gold miner Newcrest Mining (NCM) is off 0.9pct to $29.80. Medium and small size gold companies are feeling the pain with Regis Resources Limited (RRL) off 2pct to $3.94 and Kingsgate Consolidated Limited (KCN) down 1.7pct to $6.34. One of the winners in the metal space today is ferrous and nonferrous metal recycler SIMS Metal Management Limited (SGM) up 1.7 pct.

Materials stocks are weaker after falls in base metals overnight, Rio Tinto Limited, (RIO) is off 0.4pct to $64.27 and rival BHP Billiton Limited (BHP) now down 0.87pct to $34.31, with shares in Fortescue Metals Group (FMG) lower by 1.4pct to $5.90.

The S&P/ASX 200 Financials sector is outperforming the rest of the market, National Australia Bank's (NAB) share price is up 0.5pct to $25.07 and Australia and New Zealand Banking Group Limited (ANZ) also up 0.64pct to $23.60 while Macquarie Group (MQG) flat at $29.92 and QBE Insurance Group Limited (QBE) holding on to a 0.82pct gain at $14.31.

Construction and service firm, Leighton Holdings (LEI) released a statement to the market this morning and has recommenced trading after being in a trading halt for the last 2 days. Leighton advised the market that it is experiencing higher than expected cost pressures and delays on some of its larger projects, Brisbane Airport Link and the Victorian desalination plant. Leighton's expected the blowouts will reduce its net profit after tax for the 2012 fiscal year by around $148 million. Leighton had previously forecast net profit after tax of $600 - $650 million now it is looking for $400 - $450 million. Leighton's Majority shareholder Hoctief Limited (HOT.GR) lost more ground on the German Exchange overnight. The Leighton share price is off 6.69pct to $22.16.

Elsewhere, News Corp (NWS) is off 1.4pct to $19.21, and Telstra (TLS) is up 0.15pct to $3.28. Amcor Limited (AMC) up 2.47pct to $7.46.

Later today the Australian Bureau of Statistics (ABS) will release some second tier economic data but it is not expected to move markets. The ASB will release Job Vacancies for February 2012, Australian Demographic Statistics for September 2011 and the Australian National Accounts for December 2011.

The Australian dollar was down 1.1pct to US103.70c overnight and in early trade today the Aussie is buying US103.90c and €77.98c.

Juliana Roadley, CommSec Market Analyst

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