Australian Stock Market Report – Midday 5/15/2012

Lunchtime REPORT (1pm AEST)

Yesterday, the Australian share market closed higher boosted by an ease in Chinese monetary policy, with the All Ordinaries Index (XAO) up 9 points to 4,351 points.

Overnight European and we markets continued to lose ground, once again Greek political concerns and weakness in industrial growth in the Eurozone hit stocks. US markets also held back by news that Greece's leading political parties still have not been able to form a new government and if a decision is not made by Friday morning Sydney time, this will mean the Greek people will have to go back to the polls. Banking stocks continued to slide in the US as the fall out for the JP Morgan trading debacle still haunts the market. Falls in commodity prices, especially oil, pushed miners and oil players into the red and housing stocks also lost ground.

The Australian stocks exchange leading index, the All Ordinaries Index (XAO), fell over 1% in the first hour of trade and by lunch time losses in all sectors had pushed the index was still off 41 points to 4,310 points.

Energy stocks led the falls after the US$ oil price fell below US$95 a barrel overnight, the oil price continued to trade lower in early Asian trade and at lunch hit US$ 94.18 a barrel, oil and gas producers fell with, Woodside Petroleum Limited (WPL) gave back 2.48% to $32.66 and Origin Energy Limited (ORG), one of the better performers in a negative market, only down 0.46% to $13.03 and Oil Search Limited (OST) off 2.4% to $6.80.

The major food and beverage retailers moved higher this morning as the fall in the Australian dollar and defensive trading helped boost prices. Woolworths Limited (WOW) added 0.48% to $27.10 and Wesfarmers Limited (WES) , owner of Coles, up over 0.3% to $30.94. today Coco-Cola Amatil (CCL) held its annual general meeting (AGM) the company said it expects its first half year Underlying Net Profit to grow by about 4%-5%. This helped the share price move higher in morning trade up 1.65 to $12.94. The drink maker and distributer also said it is interested in re-entering the beer market with a new deal to distribute brands in the Asian region.

The banking sector, the S&P/ASX 200 Financials sector was down over 0.35% in early trade. Westpac Banking Corporation (WBC), off 0.8% to $21.87. Commonwealth Bank of Australia (CBA) added over 0.5% to $52.47. National Australia Bank Limited's (NAB) down by 0.2% to $24.75. Australia and New Zealand Banking Group Limited (ANZ) was off nearly 1% to $22.04. The insurers made back some ground, QBE Insurance Group Limited (QBE) added another 1.35% to $13.48 and Suncorp Group Limited (SUN) added 1%.

Base metal prices were lower in the London Metals Exchange (LME) overnight. Today the S&P/ASX 200 Materials sector had lost 2 % by lunchtime. Rio Tinto Limited's (RIO) share price lost 1.7% to $59.93. BHP Billiton Limited (BHP) also lower, now at $2.55 to $33.58 and Fortescue Metals Group Limited (FMG) gave back 5.8% to $5.03, its lowest prices since the start of February this year.

Elsewhere, Lend Lease limited (LLC) gave back 0.79% to $7.49 and rival, Leighton Holdings Limited's (LEI) share price came off 0.96% to $18.59.
Defensive stocks were the real winners in morning trade with Telstra Corporation Limited (TLS) one of the best performers and most highly traded stocks up 2.75% to $3.74.

Energy retailer AGL Energy Limited (AGK) added 0.89% to $14.76 while Hastings Diversified Utilities Fund (HDF) added 12.32% to $2.37 after the company said it received a conditional takeover offer valuing the HDF at $1.25 billion or 42.35 a share (less adjustments for distributions paid). The offer came from Pipeline Partners Australia Pty Limited, a consortium which includes Caisse de dépot et placement du Québec (CDPQ) and the Hastings-managed Utilities Trust of Australia (UTA). Spark Infrastructure Group (SKI) also higher in early trade, up 1.69%.

The Australian dollar (AUD) back below parity with the US dollar and lower against the Euro and Pound in morning trade. The AUD is currently trading at US$ 0.9964 and €77.69 cents.

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