Australian Stock Market Report – Midday 6/17/13

MID-SESSION REPORT

(12.30pm AEST)

After falls of around 1 per cent this morning, a comeback from the financial sector is helping minimise the losses. The All Ordinaries Index (XAO) is down by just 0.1 per cent after recording its biggest improvement of the year on Friday. The miners are the biggest contributors to the losses however this is being balanced by gains of as much as 1.6 per cent from the banks.

The Federal Reserve is smack bang in the middle of economists' radars this week, as the US central bank meets for its monthly get together. The market is hoping for clarity on the potential tapering of the Fed's US$85 billion bond buying program, which was put in place years ago to keep the US economy afloat. Speculation of tapering around a month ago has pulled the Aussie market 9 per cent lower in just four weeks.

The big four banks have recorded an amazing turnaround today. A number of the majors were down by as much as 1.5 per cent at one point, but the sector is now up for the third straight session. Commonwealth Bank (CBA) slumped to a low of $66.35 earlier, however is now trading close to $67.80. The banks are up by between 1 and 1.6 per cent.

Construction company Lend Lease (LLC) is down by 7.3 per cent after announcing a major restructure today. It plans on merging its four domestic divisions to create a more effective and competitive business. Investors are not overly impressed however, with its share price being punished at lunch.

Surfwear retailer, Billabong (BBG) is continuing to feel the pain following the collapse of takeover talks with two interested parties about a fortnight ago. BBG is down 2.6 per cent today, down 77 per cent this year and has only improved on one occasion in the past two weeks.

New car sales were flat in May. Car sales up just 0.2 per cent on a year ago. The sale of other vehicles such as trucks and buses have picked up by 3.5 per cent last month. Despite this, 1.1 million new vehicles have been sold over the year.

At lunch, 703 million shares have changed hands, worth $2.03 billion. 305 stocks are higher, 467 are in the red and 328 remain unchanged.

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