Australian Stock Market Report – Midday 3/31/14

MID-SESSION REPORT
(12.10pm AEDT)

The Australian sharemarket is recording its best daily gain in a little over a week, helped by gains in global markets on Friday. The All Ordinaries Index (XAO) is up 0.7 per cent, with all sectors in the black. The start of a new month is always a busy time for markets and economists, with a barrage of economic readings expected to be released over the next five days.

One of Australia's fastest growing telcos, TPG Telecom (TPM) is down 2.3 per cent at lunch; however is coming off the back of its biggest weekly surge in three months. Last week, TPM rose 20 per cent following a 15 per cent jump in half year profit to $90.1m.

The miners are amongst the best improvers at lunch. BHP Billiton (BHP) is 1.5 per cent firmer, while the smaller iron ore focused Rio Tinto (RIO) is up 0.72 per cent. The four major banks are surging by as much as 1.1 per cent. National Bank (NAB), ANZ Banking Group (ANZ) and Westpac (WBC) are all up by around 1 per cent while Commonwealth Bank (CBA) is up 0.7 per cent.

A number of economic reports have been issued this morning, with new home sales, private sector credit and inflation the highlights. The number of newly built properties sold in February across Australia rose by 4.6 per cent. QLD showed particular strength. Inflation is and truly under control; only edging higher by 0.2 per cent month, while private sector credit (a measure of outstanding loans) in Feb rose 0.4 per cent as expected.

Clients trading the European markets should be aware daylight saving took place in Europe yesterday. Most major European markets will be trading between 6pm (AEDT) and 2.30am (AEDT).

At lunch, 650 million shares have changed hands worth $987 million. 427 stocks are higher, 301 are in the red and 268 are flat.

The Australian dollar is hovering around a four-month high against the greenback, buying US92.4c. The RBA has been essentially expressing its intention to increase rates later on this year.

Looking ahead, locally the highlights will be a Reserve Bank monthly meeting tomorrow, together with a speech by the RBA Governor. Later this week, a monthly read on retail spending, trade and building approvals will be in focus. Across the region, two economic readings in China measuring activity levels in our largest trading partner's manufacturing sector are out tomorrow.

In Europe, the European Central Bank will be meeting on Thursday to make a decision on interest rates. No change in policy is expected although increased stimulus is a possibility. Friday will be the highlight in the U.S. with the most important monthly report on jobs scheduled for release. The market expects the creation of 190,000 jobs in March and for the unemployment rate to ease slightly from 6.7 per cent to 6.6 per cent.