Australian Stock Market Report – Midday 5/6/14

MID-SESSION REPORT
(12.20pm AEST)

The Australian sharemarket is improving for the third consecutive day, with the All Ordinaries Index (XAO) up 0.3 per cent. The market is treading water ahead of the Reserve Bank's monetary policy meeting this afternoon. Economists are widely expecting the RBA to keep interest rates on hold this month.

Almost all sectors are higher, with the exception of the miners that have been flirting with negative territory this morning.

Department store owner David Jones (DJS) is up 0.1 per cent after recording its third straight quarter of sales growth. Sales jumped by 4.1 per cent to $407.2m last quarter, with all states and key categories (departments) delivering sales growth. Online sales have jumped by 190 per cent over the year. The Foreign Investment Review Board (FIRB) has approved the $4 per share, $2.15bn takeover offer by South Africa's Woolworths today. DJS has recommended shareholders accept the offer at a meeting likely to be held next month. DJS is up by 30 per cent this calendar year.

Leighton Holdings (LEI) is up 1.4 per cent after recording a bigger than expected rise in both profit and revenue for the last quarter. The construction company has maintained its guidance (profit estimates) for the full year. LEI shares have surged by 20.6 per cent so far this year.

The financials are rising for just the second time in six days, with Westpac (WBC) the best performer at lunch. Despite an 8 per cent surge in half year profit to $3.7bn announced yesterday, WBC shares slumped by 1.2 per cent on Monday. National Australia Bank will be the third of the majors to issue its half year results in the past fortnight this Thursday. ANZ Banking Group (ANZ) recorded a $3.5bn half-year profit last week.

The miners are mixed, with BHP Billiton (BHP) and Newcrest Mining (NCM) improving while Rio Tinto (RIO) and Fortescue Metals (FMG) are both modestly softer.

On the economic front, a smaller than expected $730m trade surplus was recorded for March. The Victorian State Budget is due for release today. Holidays in Japan, South Korea and Hong Kong are keeping investors a little quiet so far today.