Australian Stock Market Report – Midday 6/18/2012

LUNCHTIME REPORT
(12.05pm AEST)

The local share market has staged a relief rally on news Greece appears set to remain in the Eurozone. The pro-bailout New Democracy party claimed victory this morning and appears likely to form a government, sparking a buying frenzy across Asia as investors pick up assets which have been heavily battered over the past month. At lunchtime in the East, the All Ordinaries Index (XAO) is up 55.9pts or 1.4pct to 4162.9.

Buying is across the board, with shares in financial group Macquarie Group (MQG) up 2.6pct to $26.13 and miner Rio Tinto (RIO) firmer by 3.3pct to $56.29.

Publishing giant Fairfax (FXJ) is a standout performer, up 7.5pct to $0.64 in early trade after announcing cost cutting measures which will save the company $170 million over three years. As part of the plan, The Sydney Morning Herald and The Age newspapers will be moved from broadsheet to tabloid format, resulting in the closure of printing presses. Online readers of both papers will also have to pay for some content, with the announcement of pay walls to the online sites. Fairfax will also slash 1900 jobs by 2015, many in editorial.

The Australian dollar received a boost on the back of the Greek election result, as investors moved to take on more risk. At lunchtime in the East the AUD is buying US101.01c, down from a high of US101.22c. The Aussie is also buying £0.6434 and €79.62c after the Euro hit a three week high against the greenback.

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