Australian Stock Market Report – Midday 5/20/13

MID-SESSION REPORT

(11.30am AEST)

The Australian share market has hit five year highs in early trade on Monday, following a strong lead from Wall Street and a weaker Australian dollar.

On Friday, the US Dow Jones Index hit all-time highs while European markets reached five year highs.

In early trade, financial stocks are well supported, with the S&P ASX 200 Financials Index (XFJ) up by 1.4 per cent.

Construction giant Leighton Holdings (LEI) has seen its share price rise by 3.8 per cent in the early session as the company holds its Annual General Meeting. LEI has told shareholders it will appoint up to five new directors before the end of June. The company has also reiterated its full year profit guidance of between $520-$560 million.

The price of gold eased by five per cent over the course of last week as investors bet that the US Federal Reserve could wind back its stimulus program. We will get a clearer indication of the Fed's thinking when Chairman Ben Bernanke delivers his testimony to Congress in Washington on Wednesday. Gold is currently at US$1364 an ounce, putting some downward pressure on gold stocks. Australia's largest listed gold producer Newcrest Mining (NCM) has seen its share price fall by 0.3 per cent in early trade. OceanaGold Corp (OGC) is lower by 3.1 per cent to $1.7725.

In economic data today, economy-wide spending rose for the eighth straight month in trend terms in April according to the Commonwealth Bank Business Sales Indicator (BSI). The BSI rose by 0.5 per cent, matching the gain in March and following a 0.6 per cent increase in sales in February.

The Australian dollar remains below parity against the greenback and is buying US97.55c. CBA FX analysts believe the Aussie could trade in a range between US95-99c this week, depending on the outcome of Chairman Bernanke's testimony.

So far, 672 million shares have changed hands, worth $1.3 billion. 400 are up, 338 are down and 280 are unchanged.

[Kick off your trading day with our newsletter]