Australian Stock Market Report – Midday 5-8-13

MID-SESSION REPORT

(12.30pm AEST)

The Australian market is rising thanks to a better than expected Chinese trade surplus and US shares closing at record highs. The All Ordinaries index (XAO) is up 0.7 per cent or 35.8 pts to 5,158.5. A US$18.16bn trade surplus in China at 11.49am (AEST) pushed local shares slightly higher initially while the Australian dollar recorded a more obvious rise to US101.9 cents.

The defensive healthcare sector is being held back by biopharmaceutical company CSL Limited (CSL). CSL is having its worst day of 2013 following reports that a phase 3 trial on an Alzheimer's disease treatment failed to assist patients. Its shares are now down by 4.69 per cent.

All other sectors are higher however, with BHP Billiton (BHP) and Rio Tinto (RIO) both up by around 1.5 per cent, while iron ore focused, Fortescue Metals Group (FMG) is up 5.15 per cent.

Seven West Media (SWM) is one of the better performers after holding an investor presentation today. SWM shares are up 13.4 per cent or 29 cents to $2.38. SWM warned of the likelihood of a small fall in profit however said it believes FY2013 will be the worst of it for the company (relating to profit). SWM is the company behind the Seven Network, The West Australian (paper) and a number of magazine publications.

Last night, the Dow Jones index closed above 15,000 points for the first time on record, taking the gains to almost 15 per cent this calendar year.

Yesterday, the Reserve Bank (RBA) made the somewhat surprise decision to cut interest rates for the first time since December 2012. Rates are now sitting at their lowest levels in 53 years. Just 12 months ago, interest rates were at 3.75 per cent. This has helped push the Australian dollar to US101.7 cents, not too far off the weakest point since July last year.

At lunch, 833.2 million shares have been traded, worth $2.54bn. 481 stocks are higher, 325 are in the red and 282 are unchanged.

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