Australian Stock Market Report – Midday 5/9/14

MID-SESSION REPORT
(12.30pm AEST)

Yesterday's improvements are being eaten away, with the All Ordinaries Index (XAO) slipping by 0.3 per cent at lunch. Local shares are now falling for the second time this week as investors shrug off last night's gains in the U.S.

Hefty losses from ANZ Banking Group (ANZ) are holding back the market most, with the major bank trading ex-dividend today. This means that investors or traders purchasing ANZ today onwards will not be eligible to receive the next dividend payment. ANZ is down 2.8 per cent at lunch and is now the main reason for today's losses. The other three majors are modestly higher at lunch, reversing their early losses.

The miners are still in the red; however the more significant losses recorded on the open are starting to dissipate. BHP Billiton (BHP) and Rio Tinto (RIO) are both down by less than 0.7 per cent at lunch. Gold producer Newcrest Mining (NCM) is up 0.1 per cent, following the 1.05 per cent slump recorded on Thursday.

Consumer related stocks are mixed; however discount retailer JB Hi-Fi (JBH) is a standout as it announced plans to buy back around $27m of its shares. This is aimed at strengthening its capital position and offsetting the impact of newly issued employee shares. JBH is up 3 per cent today; is down 9 per cent this year and surged by 107 per cent in 2013. Australia's biggest travel agent, Flight Centre (FLT) is down 2 per cent as the competition watchdog (ACCC) said the $11m fine handed down by the Federal Court in March was insufficient punishment for its anti-competitive behaviour.

NewsCorp (NWS) is up 2.5 per cent despite a fall in third quarter earnings. Revenue has slumped by 5 per cent to US$2.08bn; driven by a fall in advertising dollars and a weaker Australian dollar. NWS' Australian websites now have more than 200,000 subscribers.

The Australian dollar remains strong following U.S. dollar weakness, a jobs report and firm Chinese trade numbers yesterday.

China's inflation remains no concern for markets, with both CPI (consumer inflation) and PPI (business inflation) weaker than expected. CPI over the past year is up just 1.8 per cent while PPI is down 2 per cent.