Australian Stock Market Report – Midday 4/11/14

MID-SESSION REPORT
(12.10pm AEST)

After two straight days of gains and almost reaching a six-year high earlier this week, local stocks are falling for the third time in five sessions. The All Ordinaries Index (XAO) is down 0.9 per cent, with almost all sectors in the red. The weakness can be partly blamed on significant weakness from U.S. stocks overnight, particularly in the technology space. Investors are perhaps questioning the value of some market darlings in recent times.

Facebook and Netflix both slumped by more than 5 per cent, Google lost 3.6 per cent and Amazon dropped 4.4 per cent. Keep in mind that all these stocks have significantly outperformed the broader market over the past 12 months. Facebook is up 116 per cent over the year, Netflix is up 104 per cent, while Google has surged by a still impressive 39 per cent.

Almost all sectors are in the red locally, with the small IT sector down 2.7 per cent. The whole IT sector in Australia is smaller than Rio Tinto (RIO). The world's largest share registry, Computershare (CPU) is down 2.4 per cent, accounting software firm Xero (XRO) is slumping by 5 per cent, online car classifieds site Carsales (CRZ) is down 4.2 per cent and newly listed Freelancer (FLN) is down by more than 6.5 per cent.

The Bank of Queensland (BOQ) is in a trading halt at the request of the company pending news on an acquisition of Investec Bank and a capital raising. BOQ reported a slightly better than expected half year profit of $134.7 million for the six months to February 28. A higher dividend of 32 cents per share was also declared. Chief Executive Stuart Grimshaw considers the bank well placed to benefit from any improvement in Queensland's economy.

Coca-Cola Amatil (CCL) is down by 14.2 per cent following a profit warning by the beverage firm. CCL announced its expectation of a 15 per cent fall in half year earnings.

Casino operator, Echo Entertainment (EGP) is one of the few outperformers at lunch, with its shares up 11.4 per cent after confirming that new Chief Executive Matt Bekier begins his new role today. EGP is still down 28 per cent since the start of this calendar year however.

On the economic front in Australia, total economy-wide lending has fallen by 0.7 per cent in February according to a report. In China, both consumer and business inflation reports have come in a touch weaker than expected. The Consumer Price Index (CPI) is up 2.4 per cent over the year, while the Producer Price Index (PPI) is down 2.3 per cent.

The Australian dollar has fallen away from Thursday's high of US94.63c and currently sits at US93.8c.

At lunch, 956m shares have changed hands, worth $1.9 billion. 232 stocks are higher, 553 are in the red and 291 are unchanged