Australian Stock Market Report – Midday 4/2/14

MID-SESSION REPORT
(12pm AEDT)

The Australian sharemarket is modestly higher at lunch, with the All Ordinaries Index (XAO) rising by 13 pts or 0.3 per cent. A late surge from the miners yesterday; particularly BHP Billiton (BHP) helped minimise the influence of sluggish Chinese economic data. The S&P500 Index cracked through yet another record higher overnight.

Australia's largest miner, BHP Billiton (BHP) is up 0.8 per cent and remains in focus. Its shares are up by more than 3 per cent this week following market speculation of a potential $20 billion demerger from its non-core assets. BHP's core assets of petroleum, iron ore, copper and coking-coal contribute more than 90 per cent to earnings. A demerger has not been confirmed by the miner. The smaller RIO Tinto (RIO) is up 0.6 per cent, while iron ore firm Fortescue Metals (FMG) is 1.6 per cent higher. Australia's largest gold producer Newcrest Mining (NCM) is up 2.5 per cent at lunch; however slumped by 2.12 per cent on Tuesday.

One of the country's biggest insurance firms, QBE Insurance (QBE) is holding its Annual General Meeting today. QBE shares are up 0.16 per cent so far today and 11 per cent firmer this calendar year.

Clothing retailer Noni-B (NBL) is down 13.64 per cent after announcing a 14 per cent slump in sales between January and March. This is partly due to NBL not offering substantial discounts; aimed at boosting margins. NBL has said that it is now planning additional promotions to stimulate demand.

The major banks kicked off the session in the red; however are mostly firmer at lunch. Commonwealth Bank (CBA) is down 0.2 per cent, while Westpac (WBC), National Bank (NAB) and ANZ are all edging higher by around 0.2 per cent.

Australia's biggest telco, Telstra (TLS) remains above $5.00 per share despite slipping by 0.2 per cent.

On the economic front, building approval numbers granted to developers have slumped by a slightly more than expected 5 per cent in February. Approvals are still close to record highs however thanks to low interest rates and population growth. Approvals rose by 6.8 per cent in January and have surged by close to 30 per cent over the past 12 months. This is important as it helps fill in the gap from the pullback in mining investment.

The Australian dollar is a little weaker at lunch, buying US92.3 cents. Despite today's weakness, our currency is still close to a four-month high against the greenback.

At lunch, 639.6 million shares have changed hands, worth $1.47 billion. 423 stocks are higher, 327 are in the red and 281 are unchanged.