Australian Stock Market Report – Midday 4-24-13

MID-SESSION REPORT
(12.30pm AEST)

Australian shares are 1.2 per cent higher at midday following a strong end to trade overnight and a weaker than forecast inflation reading. The All Ordinaries Index (XAO) is currently higher for the fourth straight day, making it the second longest winning streak of the year. The index is also above 5000.0 points.

The Reserve Bank's (RBA) quarterly inflation reading came in at just 0.4%, significantly lower than market expectations. This has increased the likelihood of a rate cut by the central bank from 25% this morning to 42% following the report. The RBA has kept rates steady at 3% since December 2012.

The defensive telcos have been losing some ground for much of the session, however Telstra (TLS) is currently flat at $4.84. All other sectors are improving, with the major banks up by as much as 2.2 per cent while Commonwealth Bank (CBA) has reached a fresh record high of $71.73.

Oil and gas producer, Woodside Petroleum (WPL) is holding its Annual General Meeting (AGM) with shareholders today, a day after announcing a special dividend and plans to target an 80% payout ratio of profits. WPL is up 1.13% today, taking the gains this week to 12.6%.

The miners have recently been criticized for not paying a largely portion of their profits to investors in the form of dividends. WPL's announcement of an increased dividend has created chatter on BHP Billiton (BHP) and Rio Tinto (RIO) and the chances either would increase dividends. Both miners have been rising by at least 1 per cent so far today.

Gold miner, Newcrest Mining (NCM) continues to struggle following its disappointing production report yesterday. NCM is down 1.09 per cent and takes the losses for the year to 26.6%.

The Australian dollar has slipped to US102.3 cents, being weighed down by weak inflation.

At lunch, 825M shares have exchanged hands worth $3.86B. 444 stocks are higher, 319 are lower and 317 are unchanged.

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