Australian Stock Market Report

LUNCHTIME REPORT
(12.45pm AEST)

Yesterday the Australian share market sold off from the open and the All Ordinaries Index (XAO) closed down 46 points or 1.1pct. After a better night on overseas markets the Australian market opened 6 points higher this morning. The concerns over European growth were still around, but investors were happy to hear that the European Central Bank could extend its bond buying program if needed to stimulate the economies.

At lunchtime, the All Ordinaries Index (XAO) was up 23 points to 4,351 points. Most market sectors had rebounded from yesterday's falls. Investors moved back into mining and technology stocks while the food and beverage stocks and the media sector were a little quiet this morning, with the S&P/ASX 200 Consumer Staples index up only 0.01 pct.

Media sector was in the spotlight with the release of Ten Network Holdings Limited's (TEN) first half year results. The result was weaker than the market had expected with Net Profit after Tax (NPAT) falling over 70 pct. to $14.8 million. The result breakdown showed that TEN's television segment earnings were just slightly below market expectations at $56.8 million down 40.2 pct. while the Outdoor signage business "EYE Corp" was in line with expectations down 25.6 pct. to $7.1 million. The poor result was really to do with the tough advertising market at present and restructuring cost. The company had already flagged that it would not be paying a dividend to shareholder. TEN did not announce any update on the possible sale of EYE Corp, but did say its company strategic review was underway. TEN share prices fell over 4 pct. straight after the open of trade and by lunchtime the shares had rebounded up 0.66 pct. to $0.76. Rivals, Seven West Media Limited (SWM) was lower off 0.26% and Consolidated Media Holdings Limited (CMJ) had increased 1.3%.

Food and beverage retailer, Woolworths Limited (WOW) fell 0.04 pct. to $25.49 and Coca-Cola Amatil Limited (CCL) flat at $12.32 and retail and mining conglomerate Wesfarmers Limited (WES) only slightly higher at $29.23.

The health care sector continued to gain today with blood and plasma maker CSL Limited (CSL) added 0.34pct. to $35.51 and Cochlear Limited (COH) up 1.33 pct. to $61.51. Fisher & Paykel Healthcare Corporation Limited (FPH) fell nearly 4 pct. giving back yesterday's gains.

The S&P/ASX 200 Energy sector was up 0.88 pct helped by a rebound in U.S. oil prices overnight. Woodside Petroleum Limited (WPL) shares added 0.24 pct. to $34.12 and Santos Limited (STO) rebounded 1.37 pct. to $14.10. Coal and uranium stocks also doing well with Whitehaven Coal Limited (WHC) listing a 1.87 pct gain to $ and Paladin Energy Limited (PDN) up over 2pct.

Financial stocks were flat while insurance stocks gained, as shares in the National Australia Bank (NAB) increased by 0.8 pct. to $24.51. Australia and New Zealand Banking Group Limited (ANZ) added 0.6 pct. QBE Insurance Group Limited (QBE) regained 1.2 pct to $13.62 in early trade whilst rival insurance firms Insurance Australia Group Limited (IAG) added 1.1 pct. but Suncorp Group Limited (SUN) off another 0.37 pct. back to $8.06.

Mining stocks turned higher after gains in base metals prices on the London Metals Exchange (LME). Rio Tinto Limited (RIO) higher by 1.35 pct. to $64.38 and BHP Billiton (BHP) share price fell 2 pct. yesterday in a negative market and on the news of its plans to close one of its metallurgical coal mines in Queensland, which has been losing money due to weaker prices and higher costs. Overnight in London trade BHP rallied higher up 1.3 pct. and on the Aussie market today it has gained 0.74 pct. to $33.84.

The gold price closed slightly weaker in U.S. trade. Newcrest Mining Limited (NCM) still increased adding 0.3 pct. to $28.94 and OceanaGold Corporation Limited (OGC) up 0.4 pct. to $2.38. PanAust Limited (PNA), the Aussie gold and copper miner that has its major mining sites in Laos, today told the market it now expects to exceed its 2012 production targets for copper. PanAust also told the market it expects "to produce about 85,000 ounces of gold in 2012 at a cost of $US550 and $US600 per ounce". PNA share price lifted 6.37pct. to $3.17.

Economic data out today showed a big increase in the number of people finding work in the month of March. The Australian Bureau of Statistics labour force data for March showed that 44,000 people were employed over the month with total employment now reaching 11.49 million. Full-time employment increased by 15,800 to 8.08 million and 28,200 people started part-time employment. The result left the unemployment rate still at 5.2 pct.

The Australian dollar continued to rebound throughout the morning, helped by the positive job data and is now at US103.65c and €78.95c.

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