Australian Stock Market Report – Midday 4/10/14

MID-SESSION REPORT
(12pm AEST)

The Australian sharemarket is continuing to improve, with the All Ordinaries Index (XAO) 0.5 per cent firmer and near a six-year high. No sectors are escaping the gains, with at least modest improvements felt across the board. So far this month, local stocks have improved by 1.65 per cent.

There were three times as many jobs created in March than consensus, with 18,100 jobs added and a fall in the unemployment rate to 5.8 per cent. Part-time job creation drove the strong result with 40,200 positions added while full-time jobs slipped by 22,100. Putting this into perspective however; a staggering 80,500 full-time jobs were created in February according to the previous report. This is certainly a good sign for the broader economy as employment has been one of the lagging parts of the economy in recent years. The next few months will be key to give the Reserve Bank further clarity on what to do with interest rates. Quarterly inflation statistics later this month will also be looked at closely by the RBA. The market currently expects a rate rise later this year.

The better than expected employment report immediately resulted in a firmer dollar, which currently buys US94.3 cents.

The Ten Network (TEN) is up 2.88 per cent after issuing its half-year profit numbers. TEN recorded a $7.98m 1H14 after tax loss. TV revenue rose by 4.4 per cent to $315m, net debt is at $35.9m and no dividend was declared. The result is an improvement on the $243.3m loss recorded in the previous period. TEN is still down by around 5 per cent since 1 January and is losing ground for the fifth straight year.

Department store retailers David Jones (DJS) and Myer (MYR) were both improving earlier in the day but are now mixed. DJS is up 0.25 per cent while MYR is slipping by 0.63 per cent. Yesterday's $2.15 billion takeover offer from South African retailer Woolworths (no relation to the Australian supermarket operator) for DJS resulted in a 22 per cent surge from the upmarket retail.

Mining stocks are flat as a sector, with gains from Rio Tinto (RIO) and Newcrest Mining (NCM) being offset by losses from both BHP Billiton (BHP) and Fortescue Metals (FMG). The big four banks are all improving and are accounting for 7pts of the 20pts worth of gains for the All Ordinaries Index.

Monthly Chinese trade statistics, which are expected any minute will demand some attention. At lunch, 867.9 million shares have changed hands worth $1.87 billion. 498 stocks are higher, 248 are in the red and 302 are unchanged.