Australian Stock Market Report – Midday 5-13-13

MID-SESSION REPORT
(12.30pm AEST)

The Australian sharemarket is flat after a slightly weaker start this morning. The All Ordinaries Index (XAO) is down by just 0.3pts to 5,190.8. A fall in the business conditions survey reading has been keeping stocks subdued. Last week however, the local market rose by around 1.68 per cent, making it three straight weeks of improvements.

The mining sector is the worst performer, with BHP Billiton (BHP) down 0.98 per cent or 34 cents to $34.41 while the smaller Rio Tinto (RIO) is slumping by 1.66 per cent or 96 cents to $57.49. Gold miner Newcrest Mining (NCM) is 3.56 per cent lower while iron ore miner Fortescue Metals (FMG) is 1.53 per cent weaker.

The major banks are mostly higher with the exceptions of Westpac (WBC) and Macquarie Group (MQG). Both stocks have gone ex-dividend today, pushing prices into the red. WBC is down 3.47 per cent while MQG is 2.02 per cent lower. WBC will be paying out 86 cents per share in the form of a dividend to eligible shareholders on 2 July. MQG is paying out a $1.25 per share distribution also on 2 July. National Bank of Australia (NAB) is up 1.32 per cent, Commonwealth Bank (CBA) is 0.63 per cent firmer while ANZ Banking Group (ANZ) is edging higher by 0.22 per cent.

Paints maker, Dulux Group (DLX) announced a $32.9 million statutory Net Profit after Tax (NPAT) for the six months to 31 March. An 8 cents per share dividend will be paid. DLX has warned that it still expects its core Australian division to remain subdued over the short-term, however DLX shares are up 0.67 per cent.

On the economic front, the number of home loans issued in March rose by 5.2 per cent, a strong result as expected.

This afternoon at 3.30pm (AEST), a number of important readings are scheduled for release in China. This will include production, investment and retail spending numbers.

The weakness of the Australian dollar (AUD) remains a talking point, with our currency now trading at just US99.9 cents; the lowest level since June 2012. Comments by a Federal Reserve official last Thursday who pointed out that the Fed has limited scope for further stimulus has pushed the US dollar higher. One Australian dollar has slumped by around US2.7 cents against the greenback in just a week. Last Tuesday, the Reserve Bank's decision to cut rates for the first time since December 2012 also pushed prices a little lower.

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