Australian Stock Market Report - Midday 3/7/2012

LUNCHTIME REPORT
(12.45pm AEDT)

Investor sentiment remains subdued again today, following falls in offshore markets and weaker than expected local economic growth figures. At lunchtime in the East, the All Ordinaries Index (XAO) is down 36.6pts or 0.9pct to 1258.9.

Wall Street suffered its worst performance for 2012 so far last night, with the Dow Jones Index slumping 204pts or 1.6pct. However the Dow is up 4pct on the year, while the S&P 500 Index has risen 7pct so far in 2012 and the NASDAQ is firmer by 11.7pct.

Official figures released today show the Australian economy grew at a rate of 0.4pct in the last three months of 2011. Economists were expecting the economy to have grown at a rate between 0.7-0.8pct.

Mining stocks are among the worst performers, following significant falls on the London Metals Exchange overnight. Shares in BHP Billiton (BHP) are down 0.9pct in early trade to $34.28 while Rio Tinto (RIO) shares are lower by 1pct to $63.02.

The financial sector is lower by 0.8pct while the energy sector is off 0.3pct.

In company news today, Telstra (TLS) has finalised its $11 billion agreement with the National Broadband Network and federal government over the rollout of the NBN network. TLS shares are outperforming the market, up 1pct to $3.28.

Regional pay TV operator Austar (AUN) is firmer by 5.5pct to $1.43 on increasing confidence Foxtel will win regulatory approval for its $1.9 billion takeover of the company.

Packaging company Amcor (AMC) is firmer by 2.2pct to $6.95 after acquiring Aperio Group for $238 million. Aperio has 13 manufacturing facilities in Australia and New Zealand and another facility in Thailand. The acquisition is part of Amcor's push to expand in the Asia Pacific region, with the company expected to generate annual revenue of about $350 million.

The Australian dollar is buying US105.36c, €0.67 and £80.19c.

Juliette Saly, CommSec Market Analyst

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