Australian Stock Market Report – Midday 5/29/2012

MIDDAY REPORT
(12pm AEST)

Despite a negative start, local stocks are tracking slightly higher in early trade, thanks to gains from energy and defensive stocks. At lunchtime in the East, the All Ordinaries Index (XAO) is up 15.3pts or 0.4pct to 4135.5.

Wall Street was closed overnight for the Memorial Day public holiday, while European markets headed into negative territory on concerns about Spanish banks. Our financial sector is firmer in early trade, supported by gains from the Commonwealth Bank (CBA) and Macquarie Group (MQG). CBA shares have added 1.1pct to $49.81 while MQG is firmer by 0.8pct to $26.74.

Most mining stocks are well supported with shares in iron ore miner Fortescue Metals Group (FMG) up 4pct to $4.73, however index leader BHP Billiton (BHP) is trading lower by 1pct to $31.75, weighing on the overall share market.

Insurer Suncorp Group (SUN) has risen by 1.3pct in early trade to $7.78 after announcing plans to simplify its business which will save the company $200 million a year from 2016.

Economic news today has reveleaved new home sales rebounded from 11 year lows in April, following a very weak first quarter for the housing industry. Total new home sales rose 6.9pct in April, while sales of new detached houses were up 6.5pct and sales of new unit rose 10.3pct. However there was a fall in the number of detached (free-standing) houses sold in South Australia and Queensland.

At 12.30pm AEST the Australian dollar is buying US98.34c, £0.6279 and €78.5c.

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