Australian Stock Market Report

LUNCHTIME REPORT
(12.05pm AEST)

Local stocks snapped a four day losing streak yesterday and our market has started off well again today, after US and European markets rallied on strong Chinese data and anticipation of more good news out of China today.

After the U.S. market close the internet giant, Google reported its 1st quarter 2012 results, these result beat the street with Google reporting its profit increased 60pct. from the same period last year, helped by more ad revenue, higher paid clicks on its site up 39pct., even with the cost per clicks falling.

The All Ordinaries Index (XAO) gained 22 points on the open.

At lunchtime, the All Ordinaries Index (XAO) was up 43 points to 4,404 points. Once again we witnessed broad-based gains across all sectors in the morning session. Firmer commodity prices helping mining and energy stocks with the S&P/ASX 200 Materials sector up 2.07 pct. and the S&P/ASX 200 Energy sector also higher up over 1.2 pct. While defensive stocks took a back seat in morning trade, with the S&P/ASX 200 A-REIT (property) sector adding 0.5 pct and utility stocks up 0.08 pct. and Telstra Corporation Limited (TLS) down over 0.3pct to $3.36.

Mining stocks were higher again after gains in base metals prices on the London Metals Exchange (LME) ahead of the release of China's official GDP, Gross Domestic Product report, due out later today. Amongst the miners, BHP Billiton (BHP) firmed by 2 pct. to $334.58 while Rio Tinto Limited (RIO) added 2.9pct to $66.30 after its London share price rallied over 4.5 pct. higher overnight.

The gold price closed higher in U.S. trade overnight and at lunch was trading at US$1,677 per ounce. Newcrest Mining Limited (NCM) still increased adding 1.2 pct. to $29.27 and OceanaGold Corporation Limited (OGC) up 2.1 pct.

The S&P/ASX 200 Energy sector was up 1.2 pct helped by a rebound in U.S. oil prices overnight. Woodside Petroleum Limited (WPL) shares added 1.2 pct. to $34.65 and Santos Limited (STO) rebounded 0.9 pct. to $14.12.

Financial stocks also did well. Shares in Macquarie Group (MQG) were up 1 pct. to $28.20 while National Australia Bank (NAB) increased by 0.6 pct. to $24.74. Australia and New Zealand Banking Group Limited (ANZ) at $22.97. Insurance Australia Group (IAG) announced this morning that its Malaysian joint venture partner, AmG Insurance Berhad (AmG), had been given official government regulatory approval to acquire Malaysian insurer Kurnia for $480 million of which IAG will pay 49%. The deal is still subject to shareholder approval, this deal with will make AmG the largest general insurer in Malaysia, with 13pct. of Malaysia's general insurance market. IAG share price increased by 1.5pct to $3.47.

In the industrial space, Toll road operator Transurban Group (TCL) said toll revenue for the March quarter rose 5.1 pct. from the prior corresponding period to $230.6 million. The revenue increase was helped by higher toll fees on some of its roads. Transurban share price climbed 1.5pct. to $3.47. Seven Group Holding (SVW) shares higher today, after its heavy equiptment acquisition news yesterday up another 0.97pct. to $10.44.

The Australian dollar continued to rebound throughout the morning, helped by the positive job data and is now at US104.20c and €79.15c.

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