Australian Stock Market Report – Midday 4/4/2012

MIDDAY REPORT
(12pm AEDT)

The local share market has followed Wall Street into the red, with the All Ordinaries Index (XAO) down 17.3pts or 0.4pct in early trade to 4407.1.

Weaker than expected trade figures have contributed to the downbeat mood, after US investors bailed out of equities overnight in response to a lack of hints from the Federal Reserve about a potential third round of quantitative easing.

Energy and mining stocks are doing most of the damage, shares in index leader BHP Billiton (BHP) weaker by 2pct to $34.49 and Rio Tinto (RIO) off 1pct to $66.18.

Insurer QBE (QBE) has reported a fall in annual earnings to $683.8 million, down 45pct, after labelling 2011 as one of the worst years for catastrophic events. To counteract the loss, QBE will increase premiums by more than 7pct this year and as such expects revenue growth in 2012. QBE will also reduce its exposure to some catastrophic prone areas. Shares in QBE are up 3pct at lunchtime to $14.31.

Construction and maintenance firm Transfield Services (TSE) has cut its full year guidance by about a fifth, and now expects earnings of around $105 million, down from $130-135 million previously forecast. The company's resources services company Easternwell has been hit by $7.4 million worth of unforeseen costs due to recent cyclones in Western Australia and wet weather in Queensland. At lunchtime in the East, TSE shares are down 14.1pct to $2.14.

The Australian dollar is buying US102.74c, £0.6467 and €77.83c.

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