Australian Stock Market Report – Midday 5/11/2012

Lunchtime REPORT
(11.45pm AEST)

The Australian share market closed higher yesterday even with a slight slump in the last 2 hours of trade after the weaker than expected trade data out of China, the All Ordinaries Index (XAO) ended up 22points.

Overnight no new news was good news for the European markets. We are still at a stale mate in Greece and none of the smaller political parties can agree to unite to form a coalition government and it does look like the Greek people will have to go back to the polls. European shares lifted for four-month low, with most key index's closing higher.
In the US mixed data and weak corporate news lowered the gains by the close.
We saw the US trade deficit widening at its fastest rate 10 months in March and less people signing up for unemployment benefits in the last week. After the bell in the US concerns over big losses from trading banks over the last 3 weeks pushed the US DOW futures into the red and set the Australian markets up to open lower.

The Australian market opened slightly lower this morning, the All Ordinaries Index (XAO) started down 3 points, ahead of the all-important Chinese economic data, retail sales, inflation, out later today. By lunchtime the All Ordinaries Index (XAO) had lost a little more ground and was down 19 point to 4,335 points.

The banking sector was once again in focus after the US afterhours news that J.P. Morgan Chase & Company. (JPM.NY) said it had issued note saying it had "significant" credit portfolio loss, said to be around $2 billion. JPM.NY share price fell over 7% in US afterhours trade and this has put a real dampener on our banking sector today.

S&P/ASX 200 Financials sector lost 0.48% in early trade, our big 4 banks all lower while key insurers listed small gains. Westpac Banking Corporation (WBC), off 0.48% to $22.79, Commonwealth Bank of Australia (CBA) down 0.45% to $51.66. National Australia Bank Limited's (NAB) share price fell 1.2% to $24.31. Australia and New Zealand Banking Group Limited (ANZ) was off nearly 0.5% to $22.00, as investors await the outcome of its interest rate meeting today. AMP Limited (AMP) higher by 1.9% and QBE Insurance Group Limited (QBE) added another 0.38% to $13.27.

Global media giant, News Corporation (NWS) continued to rally higher again today after yesterday's strong profit announcement. News Corp climbed another 0.69% to $20.30.

Commodity prices stabilised overnight, base metal prices were mixed in the London Metals Exchange (LME). Zinc was the best performer up 1.5%, while copper rose 0.5%, for the first time in seven sessions. Our big name mining stocks were lower in early trade today ahead of the Chinese, industrial production and inflation numbers. Today the S&P/ASX 200 Materials sector had lost 0.45 % by lunchtime. Rio Tinto Limited's (RIO) share price lost 1.2% to $61.15. BHP Billiton Limited (BHP) off over 1% to $34.26 and Fortescue Metals Group Limited (FMG) gave back 2.55% to $5.35.

Overnight the US gold price traded sideways, but in early Asian trade the gold price has continued its weekly slide and is now down US$3.00 an ounce to US$1,592 an ounce. Our largest listed gold miner, Newcrest Mining Limited (NCM) was up another 1.5% to $25.51 and St Barbara Limited (SBM) unchanged at $2.05

Benchmark US crude oil prices were mixed on Thursday night as the weaker than expected Chinese trade data news that The Organisation of Petroleum Exporting Countries (OPEC) had pumped 31.62 million barrels last month - above the 30 million barrel target set in December. But OPEC also announced that they have now lifted expected oil demand for 2012. Woodside Petroleum Limited (WPL) rebounded 0.27% to $33.49 as Santos Limited's (STO) share price lost 0.50% to $12.84. Origin Energy Limited (ORG) lost yesterday's gains of 1.4% at $13.00 and Oil Search Limited now at $6.96.

Telstra Corporation Limited (TLS) continued to lose ground this morning off 1.6% to $3.58 and Hutchison Telecommunications Limited, the owner of Vodafone, unchanged in early trade.

Elsewhere, SKYCITY Entertainment Group Limited (SKC) told the market it had again revised its "normalised" Net Profit after Tax (NPAT) for the 2012 financial year to be in "low $140 millions" down from the earlier guidance given in February this year when it expected to see profit in the 'high $140 millions'. The cut was mainly due to softer than expected trading conditions especially at its Adelaide casino. Sky shares off 4.9% to $2.87.

Also, Westfield Group (WDC) off 0.85% to $9.32 and CFS Retail Property Trust (CFX) off 1.5% to $1.87.

The Australian dollar (AUD) continued to trade lower overnight and in morning trade. The AUD is currently trading at US$ 100.50 and €77.84 cents.

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