Australian Stock Market Report

Lunchtime REPORT
(1pm AEST)

Yesterday, the Australian share market improved for the second straight day, with The All Ordinaries Index (XAO) up over 49 points to 4,173 points. But in morning trade today the market fell back into the red.

Overnight European markets moved higher but concerns over the outcome of the European Leaders summit in Brussels tonight started to creep into the markets towards the end of trade. US markets finished slightly lower and commodity prices sold off from the get go. After the close of trade in the US, global computer operator Dell (DELL.N) reported weaker than expected earning over the last quarter with management saying "The consumer business has become a bit more challenging." Dell's share price fell over 13% in afterhours trade and is still currently down 12.7%.

Today the market here in Australia lost ground from the open of trade, other Asian markets also weaker with the NIKKEI in Japan off over 1% as investors sold out after news , late in trade yesterday, of a down grade to Japan's soverign debt from Fitch the ratings agency and weaker than expected trade data out today. On the Australian exchange investors sold out of mining, energy and retail stocks. The Australian stock exchange´s leading index, The All Ordinaries Index (XAO) fell 34 points at the open of trade. By lunch time the markets had continued its slide with the All Ordinaries Index (XAO) down 46 points to 4,127 points. At 12.15pm, news hit the screens that the World Bank had cut China's GDP forecast for 2012 from 8.4% to 8.2%.

The biggest falls this morning were in the S&P/ASX 200 Materials sector off 1.68% and S&P/ASX 200 Industrial sector off 1.25% after transport and service sector stocks fell at the open of trade.

Metal prices held up ok on the London Metals Exchange (LME) but US based gold and oil prices continued to fall overnight. In Asian trade the US oil prices fell to US$91.45 a barrel off 1.21% and gold now at $1,558 an ounce. Big name miners; Rio Tinto Limited's (RIO) gave back 1.25% to $56.18 as BHP Billiton Limited (BHP) fell by 1.3% to $31.89, and Fortescue Metals Group (FMG) down 4.1% to $4.60. Iron, coal and oil stocks also lower with Woodside Petroleum Limited (WPL) down 1% to $31.00 and Origin Energy Limited (ORG) turned lower by 1.8% at $12.72 and Oil Search Limited (OST) one of the better performers on the market up 0.15% to $6.88.
Newcrest Mining Limited (NCM) off over 1.27% to $24.92, while Western Australian based gold miner, Regis Resources Limited (RRL) slightly lower off 0.13% to $3.89 and Alacer Gold Corporation (AQG) off by 3% to $6.14.

Global Pallet transport firm, Brambles Limited (BXB) was hit by the news that Brambles will now not meet its own "closure" deadline on the sale of its Recall information management business. Brambles share prices hit a 2 month low on the news and now the shares are off 3.4% to $6.80.

This morning, Myer Holdings Limited (MYR) released its third quarter total sales for the 13 weeks to 28 April 2012. Myer sales came in at $651.1 million, down 0.9% compared to last year while, on a like-for-like basis, comp sales were also lower off 2.1%. Management said it was a solid result in a challenging environment, also Myer revised lower its expected net profit to be ´´no worse than 15% below´´ last year. Myers share price fell over 6% to $ 2.03. Rival department store owner David Jones Limited (DJS) lost 1.36% to $2.18 while food and beverage retails also lost ground. Woolworths Limited (WOW) off 0.5% to $26.76 and Wesfarmers Limited (WES) the owner of Coles, Kmart and Target off 0.8% to 29.81.

Yesterday, Qantas (QAN) has said that its international and domestic operations will be split in two and Qantas share price rose 2.8% on the news. But today in a negative market Qantas has fallen back in the red off 0.68% to $1.46. Rival in the sky, Virgin Australia Holdings Limited (VAH) flat at $0.42 a share, while Sydney Airport (SYD) one of the stocks in positive territory up 0.35% to $2.83.
Construction firm, Leighton Holdings (LEI) has also given back yesterday's gains and now is off 2.95% to $17.42.

Building stocks were again in focus this morning after better than expected existing home sales in the US overnight for the month of April up 3.4%. Today, Boral Limited's (BLD) share price fell 3.6% to $3.48 still feeling the pain from its surprise management reshuffle yesterday, while James Hardie Industries Se (JHX) one of the best performers on the market at $7.55 up 1.75% and Brickworks Limited (BKW) also higher.

The global construction group, Leighton Holdings Limited (LEI),'s share price fell into the red this morning after a strong run yesterday now off 3% to $17.40.

The banking sector, the S&P/ASX 200 Financials sector turned lower off 0.95% in early trade. Macquarie Group Limited (MQG) off 1.7% to $25.95, with our big 4 banking stocks all in the red and AMP Limited (AMP) the only one of our large insurer moving higher this morning up 0.52% to $3.89.

Elsewhere, Telstra Corporation Limited (TLS) lower in morning trade off 0.97% to $3.56.5, while Energy retailer AGL Energy Limited (AGK) turned lower off 0.4 %.

The Australian dollar (AUD) was still below parity with the US dollar. In morning trade the Aussie lost more ground, the AUD is currently at US$ 0.9771, the Aussie also lower against the Euro now at €77.07cents.

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