Australian Stock Market Report – Midday 5/16/13

MIDDAY REPORT

(12pm AEST)

Despite record highs on Wall Street overnight and a positive start to the day's trade, local stocks are back in the red at lunchtime in the East, weighed down by mining players and weakness in the healthcare stocks.

Overnight, European markets rebounded to five year highs while the US Dow Jones and broader S&P 500 Indices hit new record highs.

Concerns China may not look at further avenues to stimulate its economy and weaker commodity prices are having an impact on mining stocks. Gold fell below US$1400 an ounce overnight, which has seen Newcrest Mining (NCM) fall by 5.4 per cent to $15.01.

Yesterday, mining services provider UGL issued a profit warning sending its share price down 17 per cent. UGL is down another 6.3 per cent today, while Bradken (BKN) is off 6.7 per cent to $5.05.

A profit warning from Virgin Australia (VAH) has sent its share price down 8 per cent today to 42.25c. The airline warning that a hit in its revenue could see its profits come in lower than in 2011/12.

Graincorp (GNC) has posted a 34 per cent drop in 1H net profit to $88.2 million due to costs associated with defending itself from takeover bids. 1H revenue rose 40 per cent to $2.36 billion. GNC will pay an interim dividend of 20c per share and a special dividend of 5 cents per share.

In economic news across the region today, Japan's economy grew at a 0.9 per cent pace in the March quarter, above expectations.

There is no local economic data slated for release today and the Australian dollar has risen back above US99c.

So far on the market, 885 million shares have changed hands, worth 2.4 billion. 303 shares are up, 453 are down and 329 are unchanged.

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