Australian Stock Market Report – Midday 4-12-13

MID-SESSION REPORT
(12pm AEST)

Shares are slightly higher for fourth time this week. The Australian market has been improving modestly for most of the session, however has been flirting with negative territory over the past 30 minutes. The All Ordinaries Index (XAO) is up by 2.3 per cent since the start of the week. This makes it the best week on the local market since October 2012. Note that March was the worst month for the All Ords since May last year.

The mining sector and industrials are the two biggest drags on trade, while all other sectors are slightly higher. Australia's second biggest miner, Rio Tinto (RIO) is down 2.5 per cent after announcing a pit wall slide at its Bingham Canyon mine in Utah. RIO is currently assessing the situation; however the mine alone represents 6 per cent of its earnings forecasts for 2013. This could have an impact on the company's bottom line for the next two years.

Australia's second biggest oil and gas producer, Woodside Petroleum (WPL) is up 2.5 per cent after deciding to no longer go ahead with the controversial $45B Liquefied Natural Gas (LNG) project in Western Australia. It will now review alternative options with business partners.

There is very little in the way of market moving information scheduled for release today in Australia and the region. Tonight will be the busiest session of the week in the U.S. however, with producer prices, retail spending, consumer confidence and a Federal Reserve Chairman speech expected.

Three of the four major banks are improving, with the exception of Westpac (WBC) which is slightly lower at lunch.

Yesterday, the monthly employment numbers showed that the unemployment rate in Australia rose from 5.4 per cent to 5.6 per cent, with 36,000 jobs lost in March. Keep in mind that over 70,000 jobs were created in February (seven times more than expected).

On the local market, 539M shares exchanged hands worth $1.2B. 362 stocks improved, 358 ended in the red while 281 finished unchanged.

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