Australian Stock Market Report – Midday 3/5/14

MID-SESSION REPORT
(12.15pm AEDT)

The Australian sharemarket is up by 0.6 per cent, thanks to easing concerns (for now) relating to an Eastern European conflict. U.S markets surged by 1.5 per cent while major European stocks jumped by as much as 3.5 per cent overnight. President Putin ordered troops near the Ukrainian border to return to their bases. As expected, this resulted in an outflow of money from 'safe haven' assets such as gold, the greenback and U.S. treasuries. Around a quarter of Europe's oil and gas supplies are produced in Russia and delivered via pipelines through Ukraine.

On the economic front the Australian economy expanded by 0.8 per cent between October and December 2013. This has taken annual growth for the year to 2.8 per cent; better than what most economists expected. The Australian dollar shot higher, hitting a high of US89.9c. This is unlikely to change the Reserve Bank's stance on interest rates.

The miners are contributing to the improvements, with BHP Billiton (BHP) around 0.7 per cent firmer at lunch. Iron ore miner, Fortescue Metals (FMG) is up 0.5 per cent. Australia's largest ore miner Rio Tinto (RIO) is down 1.7 per cent as it trades ex-dividend today. RIO which is the 11th biggest company on the Australian sharemarket will be paying out a $1.20 per share final dividend on 10 April.

Qantas (QAN) continues its losing streak; slipping by 2 per cent and falling for the third straight day. Labor, crossbenchers and the Greens have said they will block legislation to change the Qantas Sales Act in the Senate. Federal Labor favours a debt guarantee.

Biopharmaceutical firm CSL is down by just 0.22 per cent or 15c, despite trading ex-dividend today for its 58.8 cent per share dividend today. This means that purchasing CSL shares today onward will not make investors eligible to receive the next dividend payable on 4 April.

Some of the better performers at lunch are: Iluka Resources (ILU), BlueScope Steel (BSL), CSR, REA Group (REA), Platinum Asset (PTM), TPG Telecom (TPM), Echo Entertainment (EGP) and Aristocrat Leisure (ALL).

At lunch, 1.58 billion shares have changed hands, worth $2.14 billion. 512 stocks are higher, 270 are in the red and 311 are unchanged.

There are no public holidays globally today and all major markets are trading normally.

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