Australian Stock Market Report – Midday 4/23/14

MID-SESSION REPORT
(12.15pm AEST)

The Australian sharemarket is improving for the fifth day, with the All Ordinaries Index (XAO) up by 0.5 per cent. A little earlier, the All Ords was trading above the 5500pt mark for only the second time this calendar year.

The two major events of the day have already come and gone. Firstly, quarterly CPI (consumer inflation) rose by a less than expected 0.6 per cent between January and March. This takes annual inflation to 2.9 per cent. This has pushed the Australian dollar significantly lower as it makes the Reserve Bank less likely to increase interest rates over the next few months. The result had a negligible impact on the sharemarket however.

Secondly, China's 'flash' manufacturing PMI was issued at 11.45am (AEST) and was largely in-line with market expectations. Flash PMI rose from 48.0 to 48.3, meaning that China's manufacturing industry is still contracting. A reading above 50.0 indicates expansion, while any number below indicates a shrinking industry. The market didn't react significantly to the read; however the mining industry has been pulling back since the inflation read at 11.30am (AEST) and has continued to do so since the Chinese data.

BHP Billiton (BHP) is flirting with $38 per share, Rio Tinto (RIO) is down slightly and Newcrest Mining (NCM) is rising for the first time in seven trading days. NCM fell short of the market's estimates for quarterly gold production today; however has maintained guidance for the full year. NCM has also confirmed that CEO and managing director elect Sandeep Biswas will step into his new role on 4 July. NCM is up 2.5 per cent. Uranium producer Paladin Energy (PDN) is up 1.1 per cent despite posting US$88.56 million in sales between January and March. A weaker uranium price, which has halved since Japan's Fukushima Daiichi disaster in March 2011 is hurting the industry. PDN shares have slumped by 90 per cent over the past three years. All sectors are currently higher, with the major banks continuing to rise strongly. Both Westpac (WBC) and ANZ Bank are trading at all-time record highs, while Commonwealth Bank (CBA) and National (NAB) are both up by at least 0.5 per cent.

Small pharmaceutical firm, Qrxpharma (QRX) is down 77 per cent following the US Food & Drug Adminstration's decision to vote against the approval of Moxduo (a drug developed for the treatment of moderate to severe acute pain.

Property group Australand (ALZ) is up 0.1 per cent after rejecting a $2.4 billion takeover bid by Stockland (SGP) today. SGP owns just shy of 20 per cent of ALZ and is down 0.9 per cent today. In an announcement to the ASX, Australand said that "the Board does not consider that the terms and conditions of the Proposal are compelling, nor does it provide sufficient consideration to Australand security holders in the context of a change of control."

The Australian dollar has slumped from US93.7c to US93c at lunch. This is almost solely due to the quarterly inflation result, which was weaker than expected. Volume remains relatively light due to the shortened trading week. 719m shares have changed hands, worth $1.79 billion.