Australian Stock Market Report – Midday 4/9/14

MID-SESSION REPORT
(12.15pm AEST)

The local share market has tested five year highs in early trade, with every sector well supported.

The US Dow Jones Index recovered a little overnight while there was a solid comeback from technology stocks which supported the NASDAQ. European markets eased after the International Monetary Fund downgraded global growth, now forecasting the world economy to grow by 3.6 per cent.

It has been a big day in the retail space, with upmarket retailer David Jones (DJS) recommending shareholders accept a $2.15 billion takeover offer from South African retailer Woolworths. The $4 cash per share proposal has seen DJS shares rise 23.3 per cent to $3.93 at lunchtime. DJS had to be placed in another trading halt just after 11am AEST as rival Myer Limited (MYR) withdrew its proposed merger offer for the retailer. MYR shares are up almost five per cent to $2.41. Woolworths is one of the biggest companies on the Johannesburg Stock Exchange and is unrelated to the Australian supermarket giant of the same name. It has a market capitalisation of $5.5 billion and annual revenue of $4 billion, almost double DJS annual revenue. The company says it wants to build the biggest retail giant in the southern hemisphere.

In economic news, consumer sentiment has inched higher for the first time in five months in April. Australians are more optimistic about the state of their finances and a little less worried about keeping their jobs.

Home loans rose by 2.3 per cent in February, above forecasts for two per cent growth.

The Australian dollar has risen to a fresh four month high against the greenback as investors chase higher yields. At 12pm AEST the AUD is buying US93.77c.

So far on the market, 892 million shares have changed hands, worth $1.9 billion. 482 are up, 270 are down and 319 are unchanged.

Japan's NIKKEI Index is down 1.5 per cent in the early session while the Shanghai Composite is up 0.25 per cent.